Is Lockheed Martin A Good Stock To Buy
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Valued at $126.7 billion, Lockheed Martin stock sports a price-to-earnings ratio of 21.5 (about 7.5% more expensive than the average S&P 500 stock), a dividend that yields 2.5% at the current share price, a long-term expected annualized earnings growth rate of 6.5%, and therefore a total return ratio of 2.4.
So Lockheed Martin stock costs a lot, but has a bigger potential market. But how much more does Lockheed Martin cost than its rival defense stocks, and does the potential justify that difference in valuation
BAE Systems -- probably the most familiar name in the GCAP coalition for American investors -- sells for just under 20 times earnings. That's a similar valuation to Lockheed's. BAE sports a superior dividend yield (3%) and faster growth estimates (10%). But I don't think the advantages of BAE's stock clearly outweigh Lockheed's advantages as a company.
Similarly, Leonardo DRS looks cheaper than Lockheed Martin at an apparent price-to-earnings ratio of 8.6. However, that company was formed out of a recent merger between Italian and Israeli defense corporations, and I'll be leery about relying on the accuracy of its financial data until it's filed a few quarterly reports. Although it could be a bargain stock, for the time being, I'm still inclined to prefer Lockheed Martin over DRS.
In aggregate, Lockheed Martin currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Lockheed Martin a solid choice for value investors, and some of its other key metrics make this pretty clear too.
We believe that Boeing stock (NYSE: BA) is currently a better pick than Lockheed Martin stock (NYSE: LMT), given its better prospects. Both companies have a similar revenue base of about $66 billion, and both are trading at a similar valuation of around 2x trailing revenues. Although Lockheed Martin LMT has seen better revenue growth over the recent years and is more profitable, better prospects and an attractive valuation for Boeing BA make it a better pick, in our view.
Looking at stock returns, LMT has significantly outperformed BA and the broader indices. While LMT is up 24% in the last twelve months, BA is up just 3%, and the S&P500 index is down 7%. There is more to the comparison, and in the sections below, we discuss why we believe BA stock will offer better returns than LMT stock in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation, in an interactive dashboard analysis of Lockheed Martin vs. Boeing: Which Stock Is A Better Bet Parts of the analysis are summarized below.
Despite higher inflation and the Fed raising interest rates, Lockheed Martin has risen 24% in the last twelve months. But can it drop from here See how low can Lockheed Martin stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
I ditched corporate America in 1994 and started a management consulting and venture capital firm ( ). I began following stocks in 1981 when I was in grad school at MIT and first analyzed tech stocks as a guest on CNBC in 1998. I became a Forbes contributor in April 2011. My 15th book -- published in November 2020 -- is \\\"Goliath Strikes Back: How Traditional Retailers Are Winning Back Customers from Ecommerce Startups.\\\" I appeared eight times in the 2016 documentary: \\\"We The People: The Market Basket Effect.\\\" ( ). I also teach business strategy and entrepreneurship at Babson College in Wellesley, Mass. ( -Peter.aspx)
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After nearly a 25% rise year-to-date, at the current levels, we believe Lockheed Martin stock (NYSE: LMT) is fully valued. LMT stock rose from $354 in early January to $443 now. The YTD 25% move for LMT compares with -14% returns for the broader S&P500 index. 781b155fdc