Top 20 Dividend Stocks of 2024

10. Lockheed Martin Corporation (NYSE:LMT)

Number of Hedge Fund Holders: 59

Lockheed Martin Corporation (NYSE:LMT) is an American aerospace and defense company that specializes in advanced technology systems, services, and products. On October 3, the company declared a 4.8% hike in its quarterly dividend to $3.30 per share. This marked the company’s 22nd consecutive year of dividend growth, which makes LMT one of the best dividend stocks of 2024. The stock has a dividend yield of 2.73%, as of December 30.

Lockheed Martin Corporation (NYSE:LMT) is anticipated to sustain its dividend in the years ahead, backed by strong cash flow generation. In the latest quarter, it reported $2.4 billion in operating cash flow and $2.1 billion in free cash flow. During this time, it distributed $1.6 billion to shareholders through dividends and stock buybacks.

Investors have shown interest in Lockheed Martin Corporation (NYSE:LMT), as defense contractors are often regarded as reliable investment choices. This reliability stems from having the US government as a stable customer and the consistent nature of defense budgets, which tend to remain steady even during economic challenges. Moreover, rising geopolitical tensions worldwide are leading to increased defense spending, aimed at replacing equipment used in conflicts and tackling escalating security issues. Lockheed Martin’s missiles and fire control division stands out as the fastest-growing segment with the highest profit margins, positioning it as a key area for future growth. The stock is up by nearly 6% in the past 12 months.

Delaware Funds by Macquarie made the following comment about LMT in its Q3 2024 investor letter:

“Finally, we added Lockheed Martin Corporation (NYSE:LMT) to the portfolio. While demand for the company’s products remains strong as a function of increased defense industry expenditures and a favorable geopolitical backdrop, margins have been impaired by government contracts that were fixed in price before the onset of rapid inflation. We believe the longer-term profit outlook is inflecting as mispriced contracts are replaced by more favorable ones, beginning in 2025. As several observers have noted before, defense companies are a great insurance policy for what you don’t know, a saying that certainly rings true amid escalating conflict across the globe.”

With a collective stake value of nearly $2.4 billion, 58 hedge funds tracked by Insider Monkey held positions in Lockheed Martin Corporation (NYSE:LMT) at the end of Q3 2024. In the previous quarter, 56 funds owned stakes in the company.