Flying High With Aerospace: The Boeing Company (BA), Lockheed Martin Corporation (LMT)

Is the CAPS system going crazy? I started to think so until I noticed that they’re expected to come back strong in FY 2013 with EPS of $2.08. Such an increase in EPS gives this company a forward P/E that’s under the 10 mark.

Is Spirit worth the risk knowing that the forward P/E is incredibly low? It could be. The price to sales ratio is currently at 0.45, and the debt to equity ratio is also within a manageable range at 0.6. The five-year ROI is not quite as appealing as Lockheed or Boeing but it may still be appealing to some at 9.5% over the last five years.

Bottom Line

I like Lockheed Martin for the incredible dividend yield and solid contracts with the U.S. Government. I assume the P/E is low on expectations that military spending could be cut in the near future, but I definitely would put this company in my portfolio for the long term. Although I’m not an expert on options I would think that the relative lack of volatility at Lockheed Martin could make the stock quite the candidate for a covered call play for long-term holders.

Boeing will continue to make and supply planes to the world’s major people movers, and they’ll also continue supplying aircraft to the Government. This company is a long-term hold and presents a nice dividend for those that choose to buy.

Spirit AeroSystems is a speculative play for anyone who’s looking for one. The company will try its best to fight back and continue to be a leading supplier to aircraft manufacturers around the world.

The article Flying High With Aerospace originally appeared on Fool.com and is written by Ash Anderson.

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