It came a little later than expected, but with four trading days left in the month, the September swoon is upon us. The Dow Jones Industrial Average and S&P 500 fell over 1.5% today due to the ongoing geopolitical tension in Ukraine and the Middle East and unusually light trading volumes from the Rosh Hashanah holiday.
While some are fretting over the pullback, I’m seeing a great buying opportunity open up. Today, I’d like to draw your attention to what I consider to be the top defense play to buy on the dip right now.
Lockheed Martin (LMT)
Lockheed Martin (LMT) is a major defense contractor. Lockheed Martin’s core businesses are aeronautics, information systems, missiles, mission systems and space systems. Between these five segments, Lockheed Martin brings in over $45 billion in sales each year.
Lockheed Martin has been going full steam in expanding its international presence, which has helped to offset lost business in the U.S. due to defense budget cuts. Just yesterday, South Korea announced that it will purchase 40 F-35A fighter jets from Lockheed Martin for a total price tag of $7 billion. The contract outlines South Korea’s largest weapons purchase ever and is a boon for Lockheed Martin.
Back on home soil, Lockheed Martin is finalizing the details on a $4 billion deal with the Department of Defense for 43 additional F-35 fighter jets. Lockheed Martin is also looking to reduce the cost of developing and building the 2,457 F-35 jets currently slated for production. Lockheed Martin’s order backlog remains strong, which translates into robust estimated sales and earnings growth for the company.
In turn, a robust Lockheed Martin is great news for investors because LMT is putting a lot of that extra cash back into the pockets of its shareholders. Today, Lockheed Martin announced a $2 billion boost to its ongoing stock buyback program, as well as a 13% increase in its quarterly dividend. Shareholders of record on Dec. 1 will receive $1.50 per share on Dec. 26.
There’s still plenty of time to add LMT shares before then. So, now is a great time to add LMT “A-rated stock” before it moves higher.
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Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
