Is Now a Good Time to Buy Lockheed Martin?

On October 22, Lockheed Martin (LMT) released its earnings report, which included several positive highlights. The company raised its full-year guidance for the second consecutive quarter, and it beat Wall Street's third-quarter estimates. Although the stock has increased over 20% year-to-date, many analysts believe Lockheed remains a strong investment for long-term investors.

Lockheed's third-quarter sales grew by 11% to $20.7 billion, while earnings per share exceeded analysts' expectations by nearly $0.50 at $7.97. All four of the company's segments reported growth, with the Missiles and Fire Control business experiencing the most significant increase at 14%. Management now projects sales to surpass $80 billion, and free cash flow of $7.8 billion to $8 billion by 2026, an $800 million increase from the previous quarter.

The company's dividend was also increased, marking 24 consecutive years of dividend increases. This steady dividend growth, coupled with a current yield of around 2.5%, makes Lockheed an appealing option for buy-and-hold investors. The company's backlog has grown by a substantial 27% to $292 billion, providing a strong revenue foundation. Recent multiyear deals, including a PAC-3 interceptor and 850 F-35 jets, further bolster the company's growth prospects.

Despite the stock's recent gains, Lockheed Martin's shares are still considered reasonably priced. The forward and trailing price-to-earnings ratios are in the teens, which is relatively low compared to other companies in the aerospace and defense sector. For investors seeking long-term growth and consistent income, Lockheed Martin's promising backlog, rising guidance, and growing dividend make it a compelling choice.