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Lockheed Martin

  • Dividend yield: 3.50%
  • P/E: 15

Lockheed Martin Corp. (NYSE: LMT)Defense contractor Lockheed Martin (LMT) warned last year at the outset of the sequestration fight it might be hurt by defense industry cutbacks. If that’s the case, you’d be hard-pressed to find that result in its financials.

Indeed, while its revenue growth over the past year (FY 2011-2012) came in at just under 2%, earnings growth was better at 3% despite the initial round of cuts during the year. As for 2013, second-quarter earnings came in 10% higher compared to last year’s similar period, despite a 4.3% decline in revenues.

The company was bullish enough to raise its full year forecast by 40 cents per share, again despite looking at the possibility of another round of defense cuts. Lockheed is in a position where it can cut expenses — mostly personnel —  fairly dramatically if programs are shelved or cut, helping to manage expenses on each project.

Lockheed’s profitability drives that fiscal year-end balance sheet, which showed nearly $2 billion in cash, and cashflow, which stood at $1.6 billion at the end of 2012. The company has raised its dividend over the last 10 consecutive years, and I would expect that to continue, with payments also coming out  in March, June, September, and December.

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