Introduction
Company history
Lockheed. Martin (ticker: LMT) is an American aerospace manufacturer that was formed in 1995 through the merger of Lockheed Corporation and Martin Marietta Corporation. Lockheed. Martin is world-famous for developing and manufacturing military aircraft, and its products are used by many countries.
The world’s largest arms dealer
Lockheed Martin is the world’s largest defense industry contractor in terms of total revenue. As of 2009, 74% of Lockheed Martin’s revenue came from the U.S. Department of Defense, other U.S. federal agencies and the militaries of other countries.
The top five arms dealers in the United States
Lockheed. Martin is the first of the five largest arms dealers in the United States, including Lockheed. Martin, Northrop Grumman (ticker: NOC), Raytheon Technologies (ticker: RTX), Boeing, and General Dynamics (ticker: GD).
Previous mergers and acquisitions
In 1998, Lockheed. Martin abandons merger plan with Northrop Grumman. If the merger of the two companies is successful, the combined company will control 25% of the US Department of Defense funding. Obviously, no one in charge of the competent authorities in the United States would like to see this happen – because national defense arms are not an ordinary business and are related to the national security and national strength of the United States.
Top 10 suppliers for Department of Defense
According to the 2021 U.S. Defense Spending Report, the following are the largest suppliers and sales contract amounts of the U.S. Department of Defense:
- Lockheed Martin: $39.2 billion
- Boeing: $23.6 billion. For Boeing company detail discussion, please read my post : “How does Boeing make money? Too big to fall“.
- Raytheon Technologies: $21.4 billion
- General Dynamics: $16.9 billion
- Northrop Grumman: $15 billion
- Pfizer, Inc (ticker: PFE): $13.3 billion
- L3Harris Technologies (ticker: LHX): $7.5 billion
- Humana (ticker: HUM): $7.1 billion
- Huntington Ingalls (ticker: HII): $7 billion
- Moderna, Inc (ticker: MRNA): $6.9 billion
Among the top ten manufacturers with the highest contract amounts, except for six, eight, and ten who are health care companies (because of the Covid-19 pandemic and vaccines), they are all arms dealers.
Product lines
| Product line | Famous products |
| Radar | Aegis combat system |
| Military transport aircraft | C-130 C-141 C-5 |
| Fighter | F-104 F-16 F-117 F-22 F-35 |
| Reconnaissance aircraft | A-12/SR-71/SR-72 RQ-170 |
| Rockets and missiles | Trident (missile) Titan RUM-139 AGM-158 JASSM AGM-158C AGM-114 |
| Satellite | DSCS-3 A2100 Satellite platform BSAT-3a BSAT-3b BSAT-3c/JCSAT-110R Martin Marietta 3000 Martin Marietta 4000 Martin Marietta 8000 Tiros-N meteorological satellite |
| Airliner | Lockheed Vega Lockheed Model 10 Electra Lockheed Model 12 Electra Junior Lockheed Model 14 Super Electra Lockheed Model 18 Lodestar Lockheed Constellation Lockheed Constellation L-049 Lockheed Constellation L-649 Lockheed Constellation L-749 Lockheed Constellation L-1049 Lockheed Constellation L-1649 Lockheed Saturn Lockheed L-188 Electra Lockheed Jetstar Lockheed L-1011 |
BUs of the company
The table below is Lockheed. Martin Corporation’s four main operating segments:
| BU | 2022 revenue (US million) | Famous products |
| Aeronautics | 26,987 | F16, F35, F22 |
| Missiles and Fire Control | 11,317 | THAAD, MIM-104 Patriot |
| Missiles and Fire Control | 16,148 | Blackhawk helicopter, sea-to-ground, sea-to-air missile launch system |
| Space | 11,532 | BSAT series of satellite systems |
Business performance
Company performance comparison
| Metric | Boeing | Air Bus | Lockheed Martin | Northrop Grumman | Raytheon Technologies |
| 2022 revenue (US million) | 66,608 +6.94% | 62,922.2 +6% | 65,984 -1.58% | 36,602 +2.62% | 67,074 +4.17% |
| Gross margin | 7.89% | 17.82% | 12.71% | 20.42% | 20.38% |
| Operating margin | (1.27)% | 8.77% | 11.32% | 17.32% | 10.76% |
| Net margin | (7.41)% | 7.23% | 8.69% | 13.38% | 7.75% |
Stock price market valuation comparison
| Metric (9/21/2023) | Boeing | Air Bus | Lockheed Martin | Northrop Grumman | Raytheon Technologies |
| Market Value (US billion) | 119.26 | 104.22 | 104.17 | 64.29 | 104.19 |
| Share price | 197.71 | 32.8 | 413.65 | 424.9 | 71.58 |
| P/E | 0 | 25.04 | 15.12 | 14.08 | 18.98 |
| P/S | 1.63 | 1.58 | 1.6 | 1.77 | 1.58 |
| Dividend yield | 0 | 1.44% | 2.9% | 1.76% | 3.3% |
| Stock performance in past 5 years | -46.84% | +4.86% | +19.57% | +33.88% | -18.34% |
Living off the flames of war
On October 6, 2023, Palestinian Hamas and Israel went to war. Thousands of people died in one day, and the conflict in the Middle East escalated. After the weekend’s precipitation, at the close of trading on Monday, October 9, Lockheed Martin’s stock price rose by more than 8.93% in one day; Raytheon rose by 4.62%.
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