Lockheed Martin Corporation: LMT Stock Is the King of Defense

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Lockheed Martin Corporation (NYSE:LMT) is the biggest pure play by market cap in the defense sector. Boeing Co (NYSE:BA) is the only one larger, but it has significant aerospace (international space station, satellites, etc) and commercial business (commercial jets, which represent half of the fleet of commercial jets worldwide), so it’s not a direct comparison.

Lockheed Martin Corporation: LMT Stock Is the King of Defense

Of the major players, Lockheed Martin has been extremely successful in becoming a major player in air, sea and land systems. Most defense firms usually have a specialty or two — like missile defense or ships — but LMT builds it all.

And if you listen to the major presidential candidates, they are both more than enthusiastic about increasing defense spending and rebuilding out forces since Afghanistan and Iraq.

LMT Stock Has a Solid Future Ahead

Lockheed Martin makes the state of the art F-35 fighter; the new generation of the U.S. Navy fleet — called littoral combat ships, or LCS — as well as all the parts and service contracts to support them.

It also recently bought legendary helicopter maker Sikorsky from United Technologies Corporation (NYSE:UTX) and is one of top stakeholders in the helicopter and vertical take-off and landing (VTOL) systems.

In fact, helicopters are becoming a very compelling area of the defense market. Now Sikorsky has access to LMT’s legendary Skunk Works team. This Lockheed Martin team works on advanced projects that are far outside the box. Skunk Works is credited with designing the U-2 spy plane, the SR-71 Blackbird spy plane, as well as stealth technology.

And thanks to Skunk Works, Lockheed Martin is currently involved in a number of interesting projects beyond its new helicopter division. Recently, it was awarded a $147 million contract for its new hypersonic plane from the Defense Advanced Research Projects Administration. DARPA is like Skunk Works for the entire U.S. defense sector.

This new program is called the Tactical Boost Glide Program. The thing that makes the plane so unique is the fact that LMT has developed a new engine that can reach speeds up to Mach 6 (6x the speed of sound) and flies at ultra-high altitudes, which means it can cover massive amounts of the globe on a single mission.

Lockheed Martin also has a new breakthrough VTOL system called ARES, which is short for Aerial Reconfigurable Embedded System. Basically it’s a VTOL system that can be attached to trucks, equipment, almost anything and then it can be flown from one point to the other.

Improvised explosive devices make travel in many conflict areas treacherous for convoys trying to supply forward bases with troops, food, medicine, water and fuel. Being able to avoid hazardous roads and deliver directly to the forward bases would be a huge advantage.

Year-to-date LMT stock is up 13% and it will be one of the first defense stocks to take off when the herd begins to stampede into defense again. But you still have time to get in before the herd. And Lockheed Martin’s 2.7% rock-solid dividend is a nice payment for your patience.

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.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/09/lockheed-martin-lmt-king-defense/.

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