Lockheed Martin-built GPS III satellite launches into orbit
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Yahoo
8 hours ago
- Yahoo
With Geopolitical Tensions Running Hot, Buy This Dividend Stock
Global geopolitical tensions have eased somewhat after the fragile ceasefire between Iran and Israel. While global markets breathed a sigh of relief, some defense stocks understandably fell. That said, I believe global geopolitical tensions are now a structural story, with the U.S. continuing to closely watch Russia and China. Given the expectations, I find Lockheed Martin (LMT) stock a good buy. The stock is a play on rising global defense spending, trades at reasonable valuations, and its dividend yield has risen to almost 3% after the drawdown in the stock. Let's discuss in detail. With Geopolitical Tensions Running Hot, Buy This Dividend Stock Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Global defense spending is expected to rise significantly over the next decade, with NATO members (with the exception of Spain) committing to invest 5% of their respective GDPs in defense over the next 10 years. While nine NATO members did not meet the 2% target that the alliance set in 2014, there could be a sense of urgency now, given the rising threat from Russia. While the collective 5% target might still be missed, we can be reasonably sure that the alliance's defense spending will be significantly higher in the next 10 years than it was in the preceding. It is still early to say how much of the higher spend will be directed to U.S. companies, but it's nonetheless an opportunity for players like Lockheed Martin. U.S. allies in the Middle East are also ramping up defense spending. Elsewhere, India, which is among the major arms importers globally, might also bump up its defense spending following the recent clashes with rival Pakistan. The country's defense spending as a percentage of GDP has fallen below 2% and it might need to increase spending as it faces threats from both China and Pakistan. Historically, the country has bought the bulk of its defense equipment from Russia (and its predecessor the Soviet Union), but has been pivoting to Western suppliers. While the country does not buy a lot of defense equipment from the U.S. yet, President Donald Trump might push it to do so to address its trade surplus. Looking stateside, while Lockheed Martin missed out on the U.S. Air Force's Next Generation Air Dominance (NGAD) program, which was awarded to Boeing (BA), the company is a strong contender for the Golden Dome missile defense program. The company is positioning its portfolio for new-age warfare, and in February, it unveiled a system to counter unmanned aerial systems. Lockheed Martin's book-to-bill ratio was below 1 in Q1, which means it booked fewer orders than it billed during the quarter. However, the company had an order backlog worth $173 billion, which is more than two times its annual revenue. Lockheed Martin is expected to post mid-single-digit top-line growth in 2025 and 2026. Its earnings per share (EPS) is expected to fall around 4% this year, in part due to higher costs. Notably, 60% of LMT's contracts are fixed-price contracts, which means that the company cannot pass on higher costs to buyers. Its earnings are, however, expected to rise over 9% in 2026. Lockheed Martin stock trades at a forward price-earnings (P/E) of 16.8x, which looks reasonable. While there are headwinds, including from tariffs, and sentiment toward defense stocks has been subdued of late, I believe higher geopolitical tensions are here to stay, which will bolster the earnings of defense companies like Lockheed Martin. Wall Street analysts, however, have a mixed opinion on LMT, and it has 11 'Strong Buy' and 11 'Hold' ratings. One analyst rates the stock as a 'Strong Sell,' and its mean target price of $525.50 is 12.5% higher than its current price. Lockheed Martin has a dividend yield of 2.85% which is higher than other defense companies like RTX (RTX), General Dynamics (GD), and Northrop Grumman (NOC). At the same time, its current valuations are below these companies. LMT stock might fit into the portfolios of investors who want to play the rising global defense spending story with a high dividend stock. The stock's risk-return looks reasonably attractive, as while the valuations are not mouthwatering, they are good enough to make an entry into this defense stock. On the date of publication, Mohit Oberoi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Sign in to access your portfolio
Yahoo
21 hours ago
- Yahoo
Boeing picks Lockheed alum for CFO seat
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Boeing swiped former Lockheed Martin finance chief Jesus 'Jay' Malave to serve as the jet maker's next CFO, with Malave to succeed Brian West in the role effective Aug. 15, according to a Monday press release. Malave served a three-year term as Lockheed Martin's finance chief, joining the defense manufacturer in January 2022 before departing from the position in April, according to his LinkedIn profile. The Arlington, Virginia-based company said West, who has served as its CFO since August 2021, will transition to the role of senior advisor to President and CEO Kelly Ortberg, also effective Aug. 15. 'With Boeing making progress in our recovery, Brian and I believe this is the right time to hand the reins to a new leader as we embark on the next chapter of our company's growth and development,' Ortberg said in an email to employees shared with CFO Dive. 'Brian will continue as a senior advisor to me and oversee a smooth transition to Jay once he joins the company.' The CFO swap comes after a rocky period for Boeing. Orberg termed the company's past few years as 'some of the most consequential in Boeing's history,' crediting CFO West's role for navigating its recovery efforts, according to the email. West 'successfully guided us through last year's historic capital raise and ensured our team always had the resources to continue the critical work to strengthen safety and quality across our operations,' Ortberg said, referring to the approximately $22 billion raised by the company in an October 2024 stock sale. 'I look forward to his continued counsel in his new role.' Prior to Lockheed Martin, West's successor Malave served as senior vice president and CFO for space and defense manufacturer L3Harris Technologies. Malave has also logged past experiences in the aerospace industry at United Technologies Corporation before its merger with Raytheon Technologies in 2020, as well as during an 11-year stint at aerospace component manufacturer Pratt & Whitney, according to his LinkedIn profile. The CFO appointment marks the latest C-suite change at Boeing since Ortberg took its top executive seat last year, as five members of its executive team departed the company shortly after Ortberg took over, including its chief information officer and communications chief, Bloomberg reported at the time. On Tuesday, Boeing also announced another executive shift, appointing company veteran Stephen Parker to the permanent role of president and CEO of its defense, space & security (BDS) business effective immediately, according to a press release. The move comes after Parker stepped into the seat on an interim basis in September 2024. Malave will step into the top financial seat as Boeing continues to face both public and regulatory scrutiny in the wake of a series of plane crashes in recent years, as well as other headwinds stemming. After a door plug flew off an Alaska Airlines flight last year, the company came under heightened scrutiny from federal regulators. In June, federal investigators faulted Boeing for failing to provide adequate training and oversight for its manufacturing operations, which led to the incident, The Wall Street Journal reported. Malave will join a C-suite tasked with both regaining public confidence as well as returning to profitability, after such incidents and a host of other challenges left the jet maker confronting severe financial setbacks. Last October, Ortberg announced the company would be laying off about 17,000 workers, as well as announcing its stock sale, both aimed at cutting down costs in the midst of a worsening liquidity crisis, AP News reported. The moves came as the company was facing an ongoing strike of 33,000 machinists before reaching an agreement in November. The strike exacerbated already strained cash flow and production challenges. In the wake of the Alaska Airline incident, federal regulators put a cap on the production of Boeing 737s until they felt confident of its manufacturing safety guidelines, AP reported. The Federal Aviation Authority is not yet ready to lift that cap, its acting administrator said in early June according to a Reuters report. In recent months, the jet maker has moved to regain some of its lost ground; for its most recent quarter ending March 31, Boeing narrowed its net loss attributable to shareholders to $37 million in the first quarter, compared to $343 million for the prior year period, according to its earnings report. The company also reported $19.5 billion in revenue, compared to $16.6 billion in the prior year period, according to its earnings results. Boeing also released a 20-year forecast in June anticipating strong continued demand, with its global fleet projected to reach about 50,000 commercial aircraft by 2044, according to company releases. However, the company's safety record has drawn fresh scrutiny after an Air India flight on a London-bound Boeing 787-8 Dreamliner crashed less than a minute after takeoff on June 12, killing at least 270 people, the BBC reported. 'Our deepest condolences go out to the loved ones of the passengers and crew on board Air India Flight 171, as well as everyone affected in Ahmedabad,' CEO Ortberg said in a statement on the flight published by the company at the time. 'I have spoken with Air India Chairman N. Chandrasekaran to offer our full support, and a Boeing team stands ready to support the investigation led by India's Aircraft Accident Investigation Bureau.' 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Business Insider
2 days ago
- Business Insider
Lockheed Martin awarded $2.97B Missile Defense Agency contract
Lockheed Martin (LMT) was awarded a sole-source, 10-year indefinite-delivery/indefinite-quantity contract with a ceiling of $2,97B. Under this follow-on contract, LM RMS will provide continuation of the Aegis Ballistic Missile Defense Combat Systems Engineering Agent in order to maintain operational relevancy in support of the Missile Defense System. The Aegis BMD CSEA is the responsible Aegis BMD Weapon System design, development, integration, sustainment, and computer program source for Aegis cruisers, guided-missile destroyers, Aegis ashore variants, Aegis Guam System, and Glide Phase Intercept. LM RMS will provide execution of future studies, concepts, and computer program development to achieve capability improvements across all phases of the fire control loop (plan, detect, control, engage, and assess) in accordance with government provided interface requirements that can be delivered to the CSEA or other government designated agents for integration into the Common Source Library, and/or Integrated Combat Systems software architecture The anticipated period of performance is July 2025 to June 2035. Research, development, test and evaluation; defense wide procurement; and operations and maintenance funds, will be utilized to execute the proposed scope. The work will be performed in Moorestown, New Jersey. The Missile Defense Agency is the contracting activity. Don't Miss TipRanks' Half-Year Sale
