Lockheed Martin Corp (NYSE:LMT)

I'm thinking this one is a little overplayed.....the comments below provided a good summary of my thinking. I will likely put a bottom stop of around 65 to $70.

Lockheed Leads GPS Satellite Deal
By: Zacks Equity Research
January 13, 2012

Lockheed Martin Corporation (LMT) has received a $238 million contract from the U.S Air Force for the production of the third and fourth satellites for Global Positioning System (“GPS III”), the next-generation GPS constellation. The Air Force plans to build up to 32 GPS III satellites.

Global Positioning System is the global standard system designed to provide accurate, reliable, continuous, free worldwide positioning, navigation and timing (“PNT”) services.

Per the contract, the old GPS satellites will be replaced by two more satellites that have the capability to meet the current and future needs of military, commercial and civilian users worldwide. With the advanced anti-jamming power, GPS III satellites have the capability to improve the spacecraft's design life and add a new civil signal designed to be interoperable with international global navigation satellite systems.

Moreover, the simultaneous installation of both these satellites will allow the Lockheed Martin-led team to maximize efficiencies in satellite manufacturing. The GPS III program is one its best moves and the first space vehicle is progressing on schedule.

Lockheed Martin is the GPS III prime contractor. The majority of the operational GPS constellation and the highly reliable GPS spacecraft are being built by the Lockheed Martin team. The team is successful in making the satellites exceed 140 cumulative operational years on-orbit with a reliability record of better than 99.9%.

The co-workers that manage and operate the GPS constellation are ITT Exelis, General Dynamics Corporation (GD), Infinity Systems Engineering, Honeywell International Inc. Co. (HON), Alliant Techsystems Inc. (ATK) and other subcontractors and Air Force Space Command's 2nd Space Operations Squadron (2SOPS), based at Schriever Air Force Base, Colorado.

The company had received an initial contract to build the first two GPS III satellites in May 2008. With the current contract, the Lockheed Martin team has the responsibility to deliver four GPS III space vehicles. It has received the core structure for the first GPS III satellite and is proceeding with assimilating it with the space vehicle's flight propulsion subsystem. The integrated core propulsion module will be dispatched to Lockheed’s GPS Processing Facility (“GPF”) by summer 2012 and will then undergo final assembly, integration and test to meet its scheduled launch in 2014.

Lockheed Martin is a global security company that is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. It is the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders from a leveraged presence in the Army, Air Force, Navy and IT programs. Also, we expect its shareholder return to continue to be shored up by the company’s focus on debt repayment, its ongoing share repurchase program and the incremental dividend.

However, we are concerned about the U.S. economic fundamentals that increase the risk for further cutbacks in defense budgets. The company presently retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.

Worried about defense spending cuts, and probably won't include this in the regular portfolio. It's a shame though, and worth buying probably closer to 70/share than 80/share. I'll take a caps chance on it, but probably not bet real money on it.

Revenue does not grow at all. As a shareholder, you should worry about that. BUT, a big BUT, wait a minute...this is the nature of this business

The management has done a great job on putting every hard earning pennies on dividend and share buy back. Every shareholder love dividend and share buy back.

I believe that the market has overreacted to LMT military exposure. Locally in TriCities, WA they have been contracted to take care of all the computer needs for Hanford Reservation - US Department of Energy largest cleanup effort.

Iran

High quarterly dividend.

Strong dividend, especially for defense sector. They're diversified, but are especially big in aircraft and littoral ships, which is the new trend - they're going to be front and center in the Pacific as the defense shift focuses to a more classic military role to counter China. This is a good stock for the long haul.

Very low P/E, great dividend, and with as many crazies who hate us out there, is the DoD's budget really gonna get cut all that much? National defense will always be a priority, especially if the world gets any crazier...

Government and military spend is slowing, economy is slowing, and pensions will weigh down profits.

A big hang over this stock is the expected cut to the U.S. defense budget. We know it's coming, the question is how much. But Fortune doesn't think the cuts will be that bad in an election year. And the company has a $73 billion order backlog plus expected earnings growth of 2% next year and 10% in 2013.

With the Stuporcommittee not being able to come to an agreement these defense stocks have huge downside negativity as 600 billion is about to be axed from the defense budget. That means that new contracts for mechanical and aerospace defense items will be impacted severly in the near term. I don't like it anymore than anyone else, but I see bad things in this sector.

Obama, Congress & the Super-committee has defense high on the radar. Expect

This is not about beating the market, at least in the short term. LMT is one of the few great companies as to which one can set up a TOTALLY FREE direct investment/drip plan. The plan is available at www.computershare.com.

I initiated with a very small $250 investment (the minimum), and a $50 monthly auto-withdraw from my bank account that will start next month. I'm tagging this because today the first $250 was withdrawn from my bank account. There are zero fees for my investment purchases, and zero fees for reeinvestment of dividends. That's not to say I'll just buy any company because there are no fees involved. But I have no problem including this company in my little portfolio.

I'm not so concerned about a huge margin of safety here, because the amounts are small, and this is just intended to be a twenty-year drip. Note you'd ideally want dividend stocks like this a tax-free IRA. I buy like this because I already otherwise max out my yearly 401k and IRA contributions.

Also, just bear in mind that the nature of mankind is to make war. I am not an optimist. At a certain point, Israel is going to attack Iran, or vice versa. At a certain point, there will likely be a conflict over Taiwan. At a certain point there will be some war we don't even understand or contemplate yet. LMT may see some lean years, but it's probably not going anywhere.

The Federal government is facing large impending budget cuts for political reasons. In the past, military spending has largely avoided the axe. However, with Social Security and Medicare seriously on the table, there is little doubt that the massive military budget will be looked at as well. Talks of budget cuts, especially if they get close to becoming law or actually become law, will scare investors away from LMT.

US need to make budget racional. As military expenditures are astronomical, they need to be cut first.

Dividends ... 5.5% payout

Large Cap stock trading above their 14-day SMA

Reinvesting makes sense for the size of their company. Airline travel is with us to stay, and hopefully, prices will drop, offering more affordable travel to all us capitalists who love it!

https://docs.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0Atnb-e5LtTUjdHplejZqR2VMTTVLeWxBcm1QbFI3RHc&output=html