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No matter who takes the White House in the next election, there is agreement on one issue: There will be spending cuts. Whether it's the draconian cuts of the Republicans or milder cuts from the Democrats, it seems rather certain that the government will be spending less money in the coming years.

One industry that many fear will incur major losses from such spending cuts is the defense industry, that military-industrial machine that churns out our fighters, warships and missile defense systems. For most of these companies, the US government is by far their largest customer, so any decrease in defense spending will directly affect their bottom lines.

But cutting defense spending is a minefield of political suicide. The GOP would sniff out and destroy any politician publicly pushing for cuts in defense spending. Jeopardizing the lives of our troops and opening up our country to terrorism are the headlines that would splash across Fox News at the Tea Party headquarters, effectively ending any legislation.

Even without spending cuts, the government has indicated that it intends to increase competition among defense contractors, with more emphasis on cost competitiveness and affordability than in the past. If this holds true, some of the defense companies will lose. Others however, will win, and our object is to find those companies.

This new environment opens up an opportunity for long-term dividend investors. Currently, many defense companies are selling at attractive valuations with healthy dividend yields and long histories of dividend growth. Here are five for further research.

Lockheed Martin Corporation (LMT) is a global security company engaged in the research, design, development, manufacture, integration, and maintenance of advanced technology systems and products. The company also provides a range of management, engineering, technical, scientific, logistic, and information services. At the current price of $79.75, the stock is trading at only 11x estimated 2011 earnings, and yields 3.8%. The dividend has grown by 44% in the past three years, and at only 37% of continuing earnings, there is plenty of room for growth. LMT already has eight years of dividend growth behind it, and this should power growth into the future.

Northrop Grumman Corporation (NOC) is an integrated enterprise consisting of businesses that cover the entire security spectrum, from undersea to outer space and into cyberspace. The company operates in four segments: Aerospace Systems, Electronic Systems, Information Systems, and Technical Services (this past March it divested its Shipbuilding segment, which went public as Huntington Ingalls Industries (HII)). With eight years of consistent dividend growth and a payout ratio of only 27%, the dividend is very safe. The most recent increase was a 6.4% bump in the quarterly payout to $0.50 earlier this year. NOC grew earnings 39% last year to $6.77 a share on revenue of 32 billion, but is expecting flat earnings this year in the $6.50-6.70 range, and recently authorized a $4 billion share buyback program. At the current price of $65.14, the stock trades at 9.6x ttm earnings.

The Boeing Company (BA) is an aerospace company. Boeing is engaged in the design, development, manufacture, sale and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services. Boeing is coming off a strong Q1, beating analysts' estimates and Q1 2010 on earnings of $0.78 a share. As the largest aircraft manufacturer in the world and sales in over 90 countries, BA has a solid position in the industry. Dividend growth stalled in 2010, but at the current price of $76.28 yields 2.2% and has a payout ratio of 38%. Slightly more expensive than the previous two, BA trades at 17.1x ttm earnings from continuing operations.

Raytheon Company (RTN) is a technology company that specializes in defense, homeland security and other government markets. Raytheon has seven years of consecutive dividend increases under its belt, and the most recent annual increase was a 15% jump to $1.72 from the $1.50 paid in 2010. The company has a strong and regular buyback program, and a payout ratio of only 31%. At the current price of $49.41, the stock yields 3.5% and is trading at just 10.3x ttm earnings from continuing operations. Coupled with a total debt to equity ratio of just 0.37 and $3.6 billion in cash, this company should serve dividend growth investors well over the next few years.

General Dynamics Corporation (GD) offers a portfolio of products and services in business aviation, combat vehicles, weapons systems, munitions, military and commercial shipbuilding, and communications and information technology. GD has the longest dividend growth streak of the group, with 20 years of uninterrupted dividend increases. The fifth-largest defense contractor in the world, GD grew earnings 10% in 2010, and analysts are expecting 5% growth in 2011. A five-year average annual dividend growth rate of 16.3% and a 2010 payout ratio of 25% should allow even the most conservative dividend growth investor to sleep well, and the current price of $71.39 carries a ttm p/e of just 10.5 and a yield of 2.6%.

Source: 5 Defense Contractors for Long-Term Dividend Investors