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Actionable news in LMT: LOCKHEED MARTIN Corp,

Lockheed Martin Stock Is An Excellent Long-Term Investment

  • Lockheed Martin stock is an excellent candidate for a diversified, large-cap dividend stock portfolio.
  • Recent budget trends have been supportive for the industry.
  • The average target price of the top analysts is at $229.50. However, in my opinion, Lockheed Martin stock price could go much higher.
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Lockheed Martin (NYSE:LMT), the world's largest military weapons maker, has been able to achieve some growth in 2015 despite budget-cutting headwinds. In 2014, the company derived 79% of its net sales from the U.S. government, including the Department of Defense (DoD) as well as non-DoD agencies. The company has continued to succeed amid reduced U.S. government spending, though growth in earnings has recently been driven by cost cuts, a pension plan restructuring, and share buybacks. However, recent budget trends have been supportive for the industry. In December 2015, Congress passed an FY16 defense budget of $573 billion, $38 billion higher than the base recommendation. Department of Defense forecasts calls for additional increases of 2% through 2020. The 2016 budget includes modernizing investments in areas such as nuclear deterrence, missile defense, cyber security and power projection.

In my view, Lockheed Martin stock is an excellent candidate for a diversified, large-cap dividend stock portfolio. The company recently raised its dividend by 10%. The annual dividend yield is pretty high at 3.03% with a payout ratio of 53%. The annual rate of dividend growth over the past three years was at 14%, over the past five years was...


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