10 Best Defense Stocks To Buy Now

02. Lockheed Martin Corporation (NYSE:LMT)

Number of Hedge Fund Holders: 56

Lockheed Martin Corporation (NYSE:LMT) is a top defense stock, making it a must-include in any defense-focused portfolio. As a global leader in security and aerospace, the company is renowned for its advanced military aircraft, missile defense systems, and space technologies. With its Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS), and Space segments, Lockheed Martin Corporation (NYSE:LMT) plays a crucial role in national security and military advancements, positioning it as a key player in the defense sector.

Lockheed Martin Corporation (NYSE:LMT) financial performance in the second quarter of 2024 further highlights its solid fundamentals. The company exceeded earnings expectations, reporting an EPS of $7.11, significantly higher than the anticipated $6.46. This strong result was driven by robust sales growth across all four business segments, which rose by 9% year-over-year to over $18 billion. This increase was bolstered by improvements in the supply chain and operational execution. The company also reported an impressive segment operating margin of 11.3%, a 20 basis point improvement compared to the same period last year.

One of the standout features of Lockheed Martin Corporation (NYSE:LMT) performance is its significant backlog of nearly $160 billion, which is more than twice its annual revenue. This backlog demonstrates strong demand for its defense technologies and ensures steady revenue streams for the future. The company generated over $1.5 billion in free cash flow during the quarter, reflecting both year-over-year and sequential growth, enabling it to invest in innovation while returning over 100% of free cash flow to shareholders through dividends and share buybacks.

Lockheed Martin Corporation (NYSE:LMT) F-35 program continues to be a major contributor to its success. The company began deliveries of the Technology Refresh 3 (TR-3) configured F-35 aircraft, enhancing the fighter jet’s capabilities. This program, along with key contracts like the $4 billion multiyear PAC-3 missile defense system order, secures Lockheed Martin Corporation (NYSE:LMT) position as a defense powerhouse with strong growth potential.