GE Aerospace vs. Lockheed Martin: Which Stock Is a Better Buy in 2026?
Commercial aviation is booming and GE Aerospace keeps raising guidance. Lockheed Martin’s record backlog reflects a world spending more on defense than ever.
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When comparing GE Aerospace and Lockheed Martin for potential investment in 2026, it's essential to consider the distinct focus and growth drivers of each company. GE Aerospace, as a specialized aviation business, derives its strength from its extensive fleet of over 44,000 commercial and 26,000 military aircraft engines. This position yields high-margin, recurring revenue through services and propulsion systems provided to airlines and government agencies worldwide.
The company's latest annual report for FY 2025 showcased significant momentum, with revenue reaching nearly $45.9 billion, reflecting an 18.5% growth compared to the previous year. Notably, net income for the period was close to $8.7 billion, yielding a healthy net margin of approximately 19%. The company's financial leverage is indicated by a debt-to-equity ratio of about 1.1x, suggesting a balanced approach to financing.
With a free cash flow of nearly $7.3 billion, GE Aerospace demonstrates robust cash generation capabilities, supporting its ongoing research and development efforts for next-generation propulsion systems. In contrast, Lockheed Martin is a diversified defense leader with a broader range of products and services, including advanced fighter planes and missile systems.
The company's revenue, totaling almost $75.1 billion in FY 2025, grew by roughly 5.7% year-over-year, with the U.S. government accounting for nearly 72% of its sales. The F-35 Lightning II program is a critical contract contributing to 27% of total sales, highlighting the company's focus on high-value, multi-year contracts. Despite a lower growth rate than GE Aerospace, Lockheed Martin's revenue is underpinned by substantial government orders, providing long-term visibility and stability.
The company's financial performance in FY 2025 included a net income of nearly $5.0 billion, resulting in a net margin of approximately 6.7%. Its financial leverage, with a debt-to-equity ratio of around 1.0x, suggests a conservative approach to debt financing. Overall, the choice between GE Aerospace and Lockheed Martin would depend on whether investors prioritize high-growth potential in the commercial aviation sector (GE Aerospace) or seek stability and long-term visibility in the defense industry (Lockheed Martin).
Brief written by urgent.news from Motley Fool's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
