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Update: Lockheed Martin's $4.7 Billion Deal For F-35s
- $4.7 billion contract has been awarded to Lockheed Martin for 43 F-35s.
- Consistently winning new contracts, even though the defense budget is facing reductions, is a positive sign for the company.
- The stock is recommended investment for short term.
Lockheed Martin: Great Stock But Patience Required
- LMT is an outstanding company with a wide moat that has greatly outperformed the market in almost every time horizon one can test.
- However, due to the restricted budget of the Department of Defense, its annual EPS growth has pronouncedly decreased, from about 30% during 2004-2008 to just 3% since then.
- Moreover, its P/E has greatly expanded, from 9-11 during 2008-2012 to a decade-high of 19 currently. Therefore, the upside potential of the stock is limited.
Lockheed Martin Changes Rules, So This Dividend Growth Investor Drops DRiP
- LMT is adding numerous fees to its direct reinvestment plan.
- LMT is a great company but it is overvalued.
- I am bailing from the DRiP and will have to decide if I want to keep LMT at all.
Building A Core Investment Portfolio For The Next 20 Years: Lockheed Martin
- Building a core investment portfolio is key to any investment strategy.
- Lockheed Martin has operated successfully in a variety of core businesses with high barriers to entry, and has consistently returned value to shareholders, making it an ideal core holding.
- Historical performance, innovation, high barriers to entry, returning value to shareholders and being a best-of-breed are all essential for qualifying as a core holding.
- Third quarter results for 2014 indicated that Lockheed Martin’s net sales had declined relative to last year’s results.
- Lockheed Martin believes that the decline in revenues is due to fewer contracts being received by the US government. It also anticipates fewer contracts in the next year.
- In order to restore investor confidence, the company has planned share buy backs of $1 billion annually for the next three years.
- It has recently signed a $4 billion deal with Pentagon for supplying another batch of F-35 fighter jets, along with a deal with a missile manufacturing company in Turkey.
- The shares offer a yield of 3.31%, which is the highest in the industry. Shares currently trade at 18.34 times its earnings.
Is High Yielding Lockeed Martin The Way To Invest In The Aerospace Industry?
- The stock appears to be fairly valued based on 2015 earnings estimates but has little earnings growth potential.
- The dividend is solid at 3.15% but doesn't have much room to grow right now.
- I'm going to take a pass on this name and continue to search for a better name in the industry.
- Lockheed Martin reported mixed financial results in its half yearly earnings release. While profits for the company increased, revenues for most of its segments experienced declines.
- In order to capitalize on the high volume demand for F35 jets, the company continues to develop the project further.
- The company is already involved in a contract with the US Military and DoD to supply jets to the agencies. Another contract seems to be underway as well.
- The company also signed a new contract with South Korea recently, to supply them with 40 F35 planes.
- Share prices have remained bullish in the market over the past six months and the trend should continue as the company continues to invest in long term growth prospects.
Update: Lockheed Martin Beats EPS Estimate, Raises FY 2014 Guidance
- Lockheed Martin reported revenues of $11.1 billion (-2.2% yoy) and EPS of $2.76 (+7.4% yoy).
- Lockheed Martin raised its FY 2014 guidance: EPS guidance is $11.15 (up from $10.85 - $11.15).
- I had forecasted earnings per share growth in my original article.
- I remain with my original conclusion: Lockheed Martin offers earnings per share growth and a compelling dividend.
- Lockheed Martin reported mixed Q314 earnings.
- Investors should sell the stock with limited upside from these levels.
- The original investment thesis anticipated that the stock could start facing issues with lower capital returned to shareholders due to the higher stock prices.
- The company has been looking to diversify revenue streams in wake of decreased national defense budgets.
- Earnings are expected to rise in spite of aviation development issues.
- Development of new compact nuclear fusion reactor could indicate new directions for company.
- Lockheed Martin stated that it achieved a breakthrough in developing a compact nuclear fusion reactor technology.
- The reactor can be “developed and deployed” in as little as ten years.
- A test version of the reactor may be ready already in a year.
- Volatility in world markets has been fueled by rising political tensions and investors feel there is an urgent need to find low beta, high cap stocks as safe investments.
- Lockheed Martin could fit the bill perfectly and it does represent itself as a safe investment.
- Lockheed Martin announced a new annual dividend of $6 per share, investors will now have a current yield of 3.4%. Their payout ratio is currently 61%, which might prove handy.
- Now would be an ideal time to invest as prices are low, and are expected to follow an upward trend.
- Lockheed Martin increased the quarterly dividend by 13% to $1.50.
- The BOD authorized a $2 billion share buyback program.
- These capital return plans make for an interesting comparison to recent buybacks and dividend yields.
- Despite U.S. defense budget cuts, Lockheed Martin is having stable revenues, and it is consistently winning new contracts.
- Due to effective cost management, the company is showing positive trend in EPS.
- Expansions in new avenues will reduce the impact of long-term defense related decline.
Dividend Investors Should Consider Lockheed Martin
- Lockheed Martin offers great returns on capital.
- Lockheed Martin's forward dividend yield is 3.4% and its Chowder number is 19, making it a good income investment.
- Lockheed Martin's multiples are low compared to its peers and the market, suggesting a good entry point.
- Announces 12th consecutive double digit dividend increase; only 6 other companies have managed this.
- Rare combination of yield, dividend growth, buyback, and capital appreciation.
- With political pressure increasing by the day, defense spending could increase further.
- Although LMT's stock has significantly outperformed the market this year and in 2013, it still has room to move up.
- Lockheed has increased its 2014 outlook for operating profit, earnings per share and cash from operations.
- Lockheed has shown significant earnings per share surprise in each one of the last four quarters.
How SpaceX Seeks To End Boeing And Lockheed's Russia-Dependent Rocket-Launch Monopoly
- SpaceX is significantly important for American space travel that is currently completely reliant on Russian cooperation and technology.
- The Government exclusively uses a Boeing and Lockheed Martin joint venture for their satellite launches: a wantonly overpriced monopoly that is entirely dependent on Russian parts and technology.
- SpaceX is close to receiving full Government clearance to compete for launches. Not only can they facilitate them at a fraction of the cost, but sans any Russian involvement.
Today, 10:17 AM
- After winning a $4.7B F-35 contract from the DoD on Friday, Lockheed Martin (LMT +0.2%) has received an order from Britain's Ministry of Defense for four more F-35 Lightning II stealth fighter jets.
- In October, the MoD said it had reached an agreement in principle to order the stealth fighters, part of a plan to purchase 14 over the next five years.
- The aircraft are due to be delivered from mid-2016.
Fri, Nov. 21, 5:32 PM
- The Defense Department awards Lockheed Martin (NYSE:LMT) a contract valued at $4.7B for an eighth batch of F-35 fighter jets, marking a drop in the cost per plane of 3.5% from the last contract and a 57% reduction from the first batch.
- Lockheed's F-35 program manager said the latest contract showed the company was making steady progress in reducing the cost of the most advanced U.S. warplane.
- The Pentagon has signed a separate contract valued at $1.05B for an eighth batch of engines built by United Technologies' (NYSE:UTX) Pratt & Whitney unit to power the jets.
Wed, Nov. 19, 5:28 PM
- Boeing (NYSE:BA) expresses frustration over Canada's decision to extend the life of its aging fleet of fighter jets to 2025 from the previous 2020 end-date, a move that will delay a decision on buying replacements - potentially bad news for Boeing, which is seeking orders to keep its F/A-18 production line running past 2017.
- Lockheed Martin's (NYSE:LMT) F-35 is seen as the leading contender to replace Canada's 80 CF-18 Hornet fighters, and the country could take delivery of an initial four F-35 jets in 2017.
Mon, Nov. 17, 6:52 AM
- Israel is likely to place a second order for between 10 and 15 Lockheed Martin (NYSE:LMT) F-35s, around half the number previously mentioned by defense sources in both countries.
- In 2010, Israel purchased its first round of jets for $2.75B, with delivery scheduled between 2016 and 2018. A preliminary deal for 25 to 31 more planes was agreed to last month during Defense Minister Moshe Yaalon's visit to the U.S.
- Strategic Affairs Minister Yuval Steinitz, told Reuters there was majority opposition to the scale of Yaalon's order and preference for a smaller purchase.
- A final decision is expected in the coming days.
- Previously: Israel places preliminary order for 25 more F-35s
Fri, Nov. 14, 6:54 AM
- The U.S. Navy version of Lockheed Martin's (NYSE:LMT) F-35 fighter jet made its first night flight off an aircraft carrier yesterday, as it neared the end of two weeks of sea-based testing aboard the USS Nimitz.
- Two F-35 C-model jets on board the carrier have already met 95% of the requirements for the first of three rounds of sea-based tests, carrying out over 101 catapult launches, 214 planned "touch and go" landings, and 104 arrested landings using a redesigned tailhook.
Tue, Nov. 11, 10:39 AM
- Lockheed Martin (LMT +0.6%) has received a $40.3M contract from the U.S. Air Force for follow-on production of Paveway II Plus Laser Guided Bomb kits.
- The kits incorporate an upgraded laser guidance package, significantly improving overall system performance and precision.
- Deliveries will begin in June 2015 and will include computer control groups and airfoil groups for GBU-10 and GBU-12 bombs.
Fri, Oct. 31, 9:41 AM| Comment!
Thu, Oct. 30, 9:23 AM
- Lockheed Martin (NYSE:LMT) has entered into a definitive agreement to acquire Systems Made Simple, a provider of health IT solutions to the U.S. government.
- "Systems Made Simple's capabilities in engineering health technology solutions are a natural extension of our existing health IT portfolio, and will enable us to deliver a broader portfolio of capabilities to meet our healthcare customers' current and future needs," says CEO Marillyn Hewson.
- The acquisition is expected to close within 30 days.
Tue, Oct. 28, 8:35 AM
- Israel has placed a preliminary order for about 25 more Lockheed Martin (NYSE:LMT) F-35s, bringing the total number the country has on order to about 44.
- Israel bought 19 F-35s for $2.75B in 2010, a deal that included options for up to 75 of the planes.
- The first batch of planes is scheduled to arrive in Israel between 2016 and 2018, although the second purchase still needs final approval by an Israeli government panel.
Sat, Oct. 25, 5:47 PM
- India will buy Israel's Spike anti-tank guided missile, rejecting a rival U.S. offer of Javelin missiles that Washington lobbied hard to win.
- The deal for at least 8,000 Spike missiles and more than 300 launchers is worth $525M.
- Spike, a "fire and forget" anti-tank missile, locks on to targets before shooting. It is produced by Israel's Rafael Advanced Defence Systems.
- The rival U.S. system is built by Lockheed Martin (NYSE:LMT) and Raytheon (NYSE:RTN). Defense Secretary Chuck Hagel pitched Javelin to India PM Narendra Modi during his September visit to Washington.
- Source: Reuters
Fri, Oct. 24, 2:05 AM
- Lockheed Martin (NYSE:LMT) and U.S. defense officials have reached agreement on the terms of a contract worth about $4B for an eighth batch of 43 F-35 fighter jets, Reuters reports.
- The new contract lowers the cost of the jets by about 3%,
- Both sides had expected to reach a deal early in the summer, but negotiations slowed after an engine failure in June grounded the entire F-35 fleet for weeks.
- LMT +0.6% premarket
Wed, Oct. 22, 10:18 AM
- Northrop Grumman (NOC +1.4%) has filed a formal protest with the U.S. Government Accountability Office against the U.S. Air Force's decision to pick Raytheon (RTN +0.3%) to develop its next-generation, long-range radar system.
- Raytheon overpowered both Lockheed Martin (LMT +1.5%) and Northrop Grumman to develop a replacement for the Air Force's current TPS-75 radar, which has been in service since the late 1960s.
- Spokeswoman Patty Welsh from Hanscom Air Force Base in Massachusetts says the Air Force issued a stop-work order for the program after the protest was filed.
- Lockheed officials say they were still reviewing the briefing they received from the Air Force about the contract award to Raytheon.
Tue, Oct. 21, 8:07 AM
- Lockheed Martin (NYSE:LMT) reports a Q3 net profit of $888M, or $2.76 per diluted share vs. $842M, or $2.57 per diluted share; revenues fell 2% to $11.1B.
- Q3 2014 net earnings include FAS/CAS pension income of $84M, which increased net earnings by $52M, or $0.16 per diluted share.
- Cash from operations of $990M vs. $900M in the third quarter of 2013.
- Operating margins edged lower at each of the company's five divisions in the quarter, with the trend most noticeable in the aeronautics sector, which builds the F-35 fighter jet. The division reported a 12% drop in earnings to $362M, and its operating margin fell to 10.2% from 11.3%.
- Q3 results
- LMT -1.6% premarket
Tue, Oct. 21, 7:27 AM
Mon, Oct. 20, 5:30 PM
Thu, Oct. 16, 10:41 AM
- Scientists and science communicators are skeptical of Lockheed Martin's (LMT -0.3%) claim that its ongoing work on a new technology could bring about functional nuclear reactors powered by fusion in the next 10 years, according to Business Insider.
- "The nuclear engineering clearly fails to be cost effective," says a researcher with the University of Washington's nuclear fusion experiment.
- A thermonuclear plasma physicist at the University of Texas says no materials are known that could handle the amount of heat for a device as small as LMT is proposing.
LMT vs. ETF Alternatives
Lockheed Martin Corp is a security and aerospace company engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products.
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