Dividend Growth Stock Overview: Lockheed Martin Corporation

Lockheed Martin builds the F-35 Joint Strike Fighter for the U.S. and Allied militaries.
Photo: Flickr.com/Mashleymorgan (U.S. Air Force Photo)

About Lockheed Martin Corporation

Lockheed Martin is one of the leading aerospace and defense companies in the United States. Headquartered in Bethesda, Maryland, the company has a wide reach to the defense, intelligence and homeland security budgets. Roughly 75% of the company’s net sales come from the U. S. Government, either as a prime contractor or a subcontractor, and more than half of net sales come from the Department of Defense. About 20% of the company’s net sales come from international customers, including foreign military sales that are contracted through the U. S. Government.

The company has four business areas, not including one business area that is in the process of being merged into a more tax-efficient trust. The four business areas are Aeronautics, Missiles and Fire Control, Mission Systems and Training, and Space Systems.

The Aeronautics segment generates about a third of the company’s net sales. It’s primary customers are the United States’ and international militaries, and the segment’s products include the F-35 Joint Strike Fighter (JSF), the C-5 and C-130 cargo aircraft, and the F-16 and F-22 fighter aircraft. The JSF is the company’s largest program, generating nearly 60% of the segment’s sales and 20% of the total company sales.

With programs like the Patriot Missile Defense System and the Multiple Launch Rocket System, the Missiles and Fire Control generates roughly 15% Lockheed’s net sales. The segment’s primary customer is the United States Army.

The Mission Systems and Training segment’s primary customer is the United States Navy, and generates about 20% of the company’s net sales. This segment is responsible for manufacturing and servicing helicopters, ship and submarine mission and combat systems, including the Littoral Combat System, and the Space Fence.

The fourth segment is the Space Systems segment, which also generates 20% of the company’s net sales. Nearly all of this segment’s revenue comes from the United States Government. Examples of segment programs include the Trident II Fleet Ballistic Missile, the Orion Multi-Purpose Crew Vehicle used by astronauts on the International Space Station, and the Space-Based Infrared Satellite System, which provides worldwide missile launch detection and tracking capabilities. This segment also includes Lockheed’s 50% interest in United Launch Alliance, which provides launch capabilities for the U. S. Air Force, NASA and commercial customers.

The company is a member of the S&P 500 index and trades under the ticker symbol LMT.

Lockheed Martin’s Dividend and Stock Split History

Lockheed Martin Dividends

Lockheed has more than quadrupled its dividend over the last 10 years.

Lockheed Martin has paid dividends since at least 1995 and grown them since 2002. The company generally announces dividend increases in September, with the stock going ex-dividend in November. In September 2016, the company’s announced a 10.0% increase to its payout, to an annualized rate of $7.28 per share.

Lockheed Martin has an outstanding record of dividend growth. Dividend increases have usually been greater than 10% and often much higher. The company has compounded the dividend at more than 15.81% a year over the last 5 years and by more than 18.40% over the last decade.

Lockheed Martin has split its stock once – a 2-for-1 stock split in May 1998.

Over the 5 years ending on December 31, 2015, Lockheed Martin stock appreciated at an annualized rate of 30.28%, from a split-adjusted $56.64 to $212.60. This dramatically outperformed the 10.20% compounded return of the S&P 500 index over the same period.

Lockheed Martin’s Direct Purchase and Dividend Reinvestment Plans

Lockheed Martin has both direct purchase and dividend reinvestment plans. You do not need to be a current shareholder to participate in the plans. The minimum initial investment in the plans must be $250, either in a single purchase or through automatic debits of at least $50 each over at least 5 months. The plans allow for full or partial dividend reinvestment.

The plans are not favorable for investors, as the fees for purchases and sales are significant. There is a $10 enrollment fee for the plans. In addition, when purchasing shares you’ll pay a fee of $5 for purchases by check or $2.50 for purchases by debit. There is a 5% fee on reinvested dividends, up to a maximum of $5. Finally, there is also a commission of 5 cents per share on all purchases. When you sell your shares in the plan, you’ll pay a fee of $15 for batch sell orders or $25 for other types of sell orders along with a 12-cent per share commission. Finally, if you place your sell order through a customer service representative on the phone, you’ll pay another $15 fee. All fees will be deducted from the sales proceeds.

Helpful Links

Lockheed Martin’s Investor Relations Website

Current quote and financial summary for Lockheed Martin (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Lockheed Martin

 

Share this post:

Recent Posts

Comments are closed.