Lockheed Martin - A Company That Rules The Future

Photo by John Torcasio on Unsplash

Introduction to Lockheed Martin

Lockheed Martin Corporation (NYSE: LMT) is a defense, security, artificial intelligence, aeronautics company that focuses on developing missiles, helicopters, ships, etc. for the defense sector. It’s main revenue comes from the government, but the company is expanding into the private sector and spending a sizable amount of money on R&D, which will help the company grow in other non-defense sectors, too.

Lockheed Martin is generally regarded as a defense stock, but this is just a stereotype. The company is working on various different sectors that have unlimited growth expectations. With the company developing products in Autonomy and Artificial Intelligence, Hypersonics, Directed Energy, Space, and Cybersecurity, Lockheed Martin IS the future.

Financials

The current valuation of the company stands at $105.71 B. The company is highly undervalued, based on the future growth potential. A company’s intrinsic value should not depend only on its current activities and cash flow, but also on the innovation and change the company is expected to produce in the future.

LMT’s P/E ratio stands at 15.35, which is extravagantly low when compared to the current S&P500 P/E of 42.70!

As of now, the company is showing promising growth in revenue as well as gross profit. The growth is steady, and consistent, which is an excellent sign.

Year 2017 2018 2019 2020
Revenue 51,048,000 53,762,000 59,812,000 65,398,000

 

Year 2017 2018 2019 2020
Gross profit 5,548,000 7,370,000 8,367,000 8,654,000

Along with this, the company pays a stellar dividend of 2.8%. Compared to the average S&P500 dividend yield (1.87%), this is excellent.

Management

When looking at a company and trying to predict its future, the company’s leadership plays an important role. If the people running a company are good, the company is sure to perform better over the years. Lockheed Martin’s new CEO, James Taiclet, is a world-class manager, an engineer who understands the company’s business, a modest person, and knows politics and policy. The Harvard Business Review named him as one of the world’s top-performing CEOs seven times! That’s beyond impressive. Under his leadership, Lockheed Martin is bound to perform better, and deliver more.

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Disclosure:  I do not currently own any LMT shares, but I plan to buy a stake in the future.

Disclaimer: This article is not an investment recommendation,  more

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