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Lockheed Martin (LMT) Dividend Stock Analysis

by | Dividend Contenders

Lockheed Martin Dividend

(updated 2/23/2018)

The Lockheed Martin dividend has been paid continuously since 2000 and increased for 15 consecutive years;
qualifying the company as a Dividend Contender.

Price: $358.50
Dividend Yield: 2.2%

Current Dividend: $8.00
Cash Flow From Operations (CFO) Per Share (ttm): $22.29
Free Cash Flow Per Share (ttm): $18.24

Market Capitalization: $102 B
Enterprise Value:  $113  B

Dividend Analyzer Checklist

                    (updated February 2018)

Valuation Score (19/34 points)

Free Cash Flow Yield (ttm): 5.2% (11/17 points)
EV to EBIT (ttm): 19.1
EV to EBITDA (ttm): 15.7  (8/17 points)
Price to Sales Ratio (ttm): 2.0
Price to Book Value (ttm):  42.1
Price to Earnings Ratio (P/E) (ttm):  52
PE 10: 37

Profitability Score (11/33 points)

Operating Earnings Yield (ttm): 5.7%  (7/15 points)
Net Income (ttm): $2002 M
Gross Profit (ttm): $5548 M
Total Assets: $46521 M
Gross Profitability Ratio = GP / Total Assets: 12% (4/18 points)
Cash Return On Invested Capital (CROIC)(tttm): 34%
Return on Invested Capital (ROIC): 13%

 

Dividend Safety Score (20/33 points)

Dividend Payout Ratio (ttm): 51%
Cash Dividend Payout Ratio (ttm): 41%  (9/12 points)
Net Financial Debt: $11402 M
Total Assets: $46521 M
Net Financial Debt / Total Assets: 25% (5/12 points)
Net Financial Debt to EBITDA (ttm): 201%
Piotroski Score (1-9) (TTM): (6/9 points)

TOTAL POINTS – (50/100) (50 is an average score)

Earnings Report: 1/29/18
Next Earnings Report: 4/25/18

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Rankings & Recommendations

(updated February 2018)

Lockheed Martin is ranked #217 (out of 432) overall and #62 (out of 97) in the Industrial Sector by the Dividend Analyzer.

Type of Investor / Recommendation

Large Diversified Dividend Portfolios / Average Option
Looking For Exposure to Industrial Sector /  Average Opton
Deep Value Investors / Avoid

Position Disclosures:
DVB Portfolio Stocks – None
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Company Description

Sector: Industrials
Industry: Aerospace & Defense

Lockhheed Martin is the world’s largest defense contractor with approximately 51 billion dollars in revenue for 2017. Sixty percent of revenue is received from the U.S. Department of Defense, 20% from other U.S. Government agencies, and 20% foreign militaries.

The company operates in four segments: Aeronautics accounts for nearly 40% of revenues, mission systems (combat ships and naval electronics, helicopters, etc.) 30%, space systems and missiles and fire control account for the remaining 30%.

SWOT Analysis

Strengths

The world is a very dangerous place, and there is growing recognition among the populace and Congress that increased resources are needed to meet our needs. The Iraq and Afghanistan wars have left the military with high replacement and refresh needs.

Lockheed Martin is well positioned to provide the research, layout, manufacture, products, improvements, and service for systems required by the military industrial complex.

Weaknesses

Working with government entities is never easy or efficient. Companies find themselves at the mercy of government with obstacles such as excessive red tape, prohibitive regulation, and constantly changing budgets. This makes the long term planning required for major systems challenging.

Opportunities

Long term experience working with governments, and near monopolies (or at least duopolies) in most of their product lines, provide unique benefits to LMT. In other words, their main weakness becomes an opportunity because so few companies can do what Lockheed Martin does so well.

Threats

Austerity in military budgets in general have kept growth rates small.  Any long periods marked by declining global conflict (which we all hope for) could bring even more drastic cuts to military spending.

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Disclaimer: While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.
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