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Lockheed Martin outperform trends again with a dividend increase

Lockheed Martin outperform trends again with a dividend increase

Lockheed Martin (NYSE: LMT) stock price has been outperforming peers over the past couple of months amid its focus towards defense products and technologies. The sales growth of 12% year over year in the latest quarter has helped in changing investor’s sentiments.

Lockheed stock price is up almost 40% from March low. Its shares are currently trading around $380, down from an all-time high of $442 that it had hit early this year.

LMT Lockheed Martin Corporation daily Stock Chart
Lockheed Martin stock performance. Finviz chart.

Last week, Lockheed Martin has raised its quarterly dividend by 8.5% to $2.60 per share. Its competitors, on the other hand, are struggling with cash generation and slowing revenues. Boeing (NYSE: BA) has suspended its dividends due to slowing revenues and cash problems.      

Compared to its closest peer Boeing, Lockheed has very limited exposure towards the struggling passenger aerospace industry. Instead, the company is dealing with military products and missile systems.

Lockheed Martin CEO Jim Taiclet says they are only looking to expand their defense business and the company is not planning to move into the commercial aerospace industry, which is dealing with a historical collapse.

“The second-quarter results leave unchanged thesis that Lockheed’s alignment with faster-growing end markets and strong performance on the F-35 produce above-average sales and earnings growth with less margin risk.” – Stifel analyst Joseph DeNardi said, and has rated Lockheed Martin stock a Buy.

Lockheed has reported a record backlog of close to $150 billion in orders at the end of the second quarter. U.S. Air Force has recently awarded a $62 billion contract for the production of F-16 fighter jets.

The company has raised its full-year outlook after seeing robust demand for its products. It now expects diluted earnings per share around $23.75 to $24.05 relative to the previous forecast for $23.65 to $23.95. It anticipates full-year revenue in the range of $63.5 billion to $65 billion, up from earlier guidance of $62.25B.

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