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Lockheed Martin (NYSE:LMT) - Dividend Idea Of The Week With A 4.95% Yield

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October 14, 2012 – Comments (1) | RELATED TICKERS: LMT , RTN , BA

Weekly Dividend Stock Ideas Researched by The Dividend Yield Weekly. Our weekly Dividend Idea is the aerospace- and defense-related stock, Lockheed Martin (LMT). The company's market price is estimated at $84 by Morningstar, which represents a downside of 9.4%. LMT has a Financial Strength rating of 7 out of 10 and is an attractive dividend growth stock with big value. The company raised dividends over 10 consecutive years and raised dividends in average with a double-digit yield. The payout is only at 43.9% at a twelve-trailing-month basis. The strong cash flow of $4.3 billion from last fiscal year is a solid basis for further dividend hikes. In 2011, the company paid $1.1 billion in dividends and bought $2.5 billion of its own shares. We like the strong cash flow of LMT and the high exposure to the U.S. economy (85% of sales are generated in the United States) as well as the networking to the government. This could also be a big burden if the U.S. government cuts military budgets due to financial spending problems. It could also be an accelerator if the budgets are raised in the long-run. In addition, we see the company in its early stage as a highly profitable commodity trader. LMT is one of the largest military supplier. The full report is readable here.

Lockheed Martin is a global security and aerospace company principally engaged in the research, design, development, manufacture, integration, and sustainment of technology systems and products. The company operates in four segments: aeronautics, electronic systems, information systems and global solutions, and space systems. About 36.2% of sales are generated from electronic systems and 32.5 percent from aeronautics. 

Lockheed Martin has a market capitalization of $30 billion. The company employs 123,000 people, generates revenue of $46.4 million and has a net income of $2.7 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.9 million. The EBITDA margin is 10.54 percent (its operating margin is 8.56 percent and its net profit margin is 5.74 percent). 

Financial Analysis: The total debt represents 17.04 percent of the company’s assets and the total debt in relation to the equity amounts to 645.35 percent. Due to the financial situation, a return on equity of 118.59 percent was realized. Twelve trailing months earnings per share reached a value of $8.54. Last fiscal year, the company paid $3.25 in the form of dividends to shareholders. 

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.89, the P/S ratio is 0.65 and the P/B ratio is 29.95. It has a dividend yield of 4.96 percent and a beta ratio of 0.93. 

Here is a short overview of the best yielding competitors:

Raytheon Company (RTN) has a market capitalization of $18.22 billion. The company generates revenue of $24.8 million and has a net income of $1.8 million. The firm’s EBITDA amounts to $3.3 million. The EBITDA margin is 13.29 percent (it has an operating margin of 11.49 percent and a net profit margin of 7.63 percent).

The total debt represents 17.81 percent of the company’s assets and the total debt in relation to the equity amounts to 56.29 percent. Last fiscal year, a return on equity of 20.82 percent was realized. Twelve trailing months earnings per share reached a value of $5.75. Last fiscal year, the company paid $1.72 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 9.55, the P/S ratio is 0.73 and the P/B ratio 2.27. It has a dividend yield of 3.64 percent and a beta ratio of 0.71.

Northrop Grumman (NOC) has a market capitalization of $17.01 billion. The company generates revenue of $26.4 million and has a net income of $2 million. The firm’s EBITDA amounts to $3.7 million. The EBITDA margin is 14.29 percent (its operating margin is 12.4 percent and a net profit margin 7.9 percent).

The total debt represents 15.54 percent of the company’s assets and the total debt in relation to the equity amounts to 38.2 percent. Last fiscal year, a return on equity of 17.55 percent was realized. Twelve trailing months earnings per share reached a value of $7.80. Last fiscal year, the company paid $1.97 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 8.82, the P/S ratio is 0.64 and the P/B ratio is 1.69. It has a dividend yield of 3.21 percent and a beta ratio of 1.10.

General Dynamics (GD) has a market capitalization of $23.32 billion. The company generates revenue of $32.6 million and has a net income of $2.5 million. The firm’s EBITDA amounts to $4.4 million. The EBITDA margin is 13.52 percent (it has an operating margin of 11.71 percent and a net profit margin of 7.81 percent).

The total debt represents 11.27 percent of the company’s assets and the total debt in relation to the equity amounts to 29.7 percent. Last fiscal year, a return on equity of 19.23 percent was realized. Twelve trailing months earnings per share reached a value of $6.85. Last fiscal year, the company paid $1.88 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 9.64, the P/S ratio is 0.71 and the P/B ratio is 1.77. It has a dividend yield of 3.11 percent and a beta ratio of 1.24.

L-3 Communication (LLL) has a market capitalization of $6.98 billion. The company generates revenue of $15.1 million and has a net income of $968 million. The firm’s EBITDA amounts to $1.8 million. The EBITDA margin is 11.87 percent (its operating margin is 10.3 percent and its net profit margin is 6.38 percent).

The total debt represents 26.62 percent of the company’s assets and the total debt in relation to the equity amounts to 62.17 percent. Last fiscal year, a return on equity of 14.24 percent was realized. Twelve trailing months earnings per share reached a value of $9.05. Last fiscal year, the company paid $1.80 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 8.00, the P/S ratio is 0.46 and the P/B is ratio 1.08. It has a dividend yield of 2.77 percent and a beta ratio of 0.96.

The Boeing Company (BA) has a market capitalization of $54.02 billion. The company generates revenue of $68.7 million and has a net income of $4 million. The firm’s EBITDA amounts to $6.8 million. The EBITDA margin is 10.02 percent (it has an operating margin of 8.5 percent and a net profit margin of 5.84 percent).

The total debt represents 15.47 percent of the company’s assets and the total debt in relation to the equity amounts to 351.95 percent. Last fiscal year, a return on equity of 127.72 percent was realized. Twelve trailing months earnings per share reached a value of $5.77. Last fiscal year, the company paid $1.70 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 12.46, the P/S ratio is 0.77 and the P/B ratio is 15.01. It has a dividend yield of 2.48 percent and a beta ratio of 1.23.

Honeywell (HON) has a market capitalization of $46.9 billion. The company generates revenue of $36.5 million and has a net income of $1.8 million. The firm’s EBITDA amounts to $3.5 million. The EBITDA margin is 9.71 percent (it has an operating margin of 6.25 percent and a net profit margin of 5.11 percent).

The total debt represents 18.98 percent of the company’s assets and the total debt in relation to the equity amounts to 69.91 percent. Last fiscal year, a return on equity of 17.31 percent was realized. Twelve trailing months earnings per share reached a value of $2.66. Last fiscal year, the company paid $1.37 in the form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 22.67, the P/S ratio is 1.29 and the P/B ratio is 4.32. It has a dividend yield of 2.47 percent and the beta ratio of 1.35.

Take a closer look at the full company report of Lockheed Martin (LMThere.

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Writer's Note: I am long LMT and RTN. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

The stock analyses, including the rating and up/down potential, is based on historical information and provided by several data providers like Thomson Reuters, Morningstar, Google Finance, Yahoo! Finance and MSN. The analyses assumes the stock will perform in the future as it has in the past. This is generally never true. Material presented here is for informational purposes only. Before buying or selling a security, you should do your own research and reach your own conclusion.

1 Comments – Post Your Own

#1) On October 15, 2012 at 12:40 PM, ikkyu2 (99.24) wrote:

You have got your millions and billions crossed up in the earnings figures.

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