2.27% Dividend Yield, 23 Years of Dividend Hikes – A Defense Contractor With A Record $194B Backlog
This is the business that builds the fighter jets, missiles, submarines, and satellites that define modern military power, operating on multi‑year contracts with funded government budgets that create a visibility most industrials can only dream of. Its backlog acts like a revenue conveyor belt, smoothing out program risks and letting the company plan capex, dividends, and returns years in advance. When demand for high‑end capabilities keeps rising and the customer (the U.S. government) has a habit of paying up for proven execution, earnings turn into a reliable compounding machine.
Lockheed Martin (LMT)
Financial Score: 98 / 99
Quick Tip
To keep your portfolio strong, stay on top of the financials for each company you hold. Solid companies mean better returns, so be sure to check in on their quarterly and annual numbers.Interesting stocks usually score 80+ on the Financial Scale, with top players hitting 90+. If that score dips below 80, it might be a good time to consider cutting ties before things take a turn.Lockheed Martin (LMT) is a global security and aerospace company headquartered in Bethesda, Maryland, with four main business areas: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. It serves primarily the U.S. Department of Defense and international governments, delivering everything from F-35 fighters and hypersonic weapons to missile defense systems and space vehicles, with a focus on long‑term programs that span decades. The company’s growth has been fueled by consistent program wins and backlog expansion, evolving from a post‑Cold War consolidator into the prime contractor for many of the Pentagon’s highest‑priority capabilities.
Dividend discipline: a big check with room to grow
Lockheed Martin pays $13.80 per share annually, giving a 2.27% dividend yield that’s not flashy but backed by a 62.12% payout ratio—high enough to deliver real income, low enough to keep growing without pressure. Twenty‑three consecutive years of dividend growth and +36.00% dividend growth over the last five years show the board has made the payout a core commitment, raising it steadily as earnings and cash flow expanded. That’s the beauty here: defense contracts are lumpy, but the backlog smooths it out, so management can hike the dividend like clockwork while still funding R&D and buybacks. It’s less “yield chase” and more “total return with a nice check every quarter.”
Q4 2025: sales up 6%, backlog hits record high
For Q4 2025, reported January 28, 2026, Lockheed Martin reported sales of $20.3 billion, up from $18.6 billion a year earlier, with net earnings of $1.4 billion, or $5.80 per diluted share. Segment operating profit was $2.1 billion with a 10.1% margin, and free cash flow was strong at $2.8 billion in the quarter. For full‑year 2025, sales increased 6% to $75.0 billion, net earnings were $5.0 billion ($21.49 per share, including a pension settlement charge), and the backlog reached a record $194 billion, up 17% year over year.
Growth levers: F‑35 deliveries, hypersonics, and international demand
Lockheed Martin delivered a record 191 F‑35 fighters in 2025, topping the prior high of 142 in 2021 and clearing a backlog of parked jets, which helped Aeronautics sales reach $30.3 billion for the year. The backlog hit $194 billion, up $17.3 billion or 17% year over year, equating to 2.5 times annual sales and providing a multi‑year revenue runway across all segments. Missiles and Fire Control sales grew 14% to $14.5 billion, driven by hypersonic weapons and international demand, while Space grew 4% to $13 billion, underscoring the company’s position as a prime contractor for priority Pentagon programs.
Fun Fact – The F‑117 Nighthawk’s stealth origins
Lockheed Martin’s Skunk Works division developed the F‑117 Nighthawk, the first operational aircraft designed around stealth technology, which flew its first secret mission in 1983 and helped redefine aerial warfare during the Gulf War. That “Have Blue” prototype from the late 1970s was so classified that early pilots didn’t even know what they were flying, marking the start of a stealth lineage that now includes the F‑35 and shapes modern fighter design.
Final Take – A dividend grower with a backlog moat
Lockheed Martin looks set up for a long runway because the $194 billion backlog is not just big, it is unusually visible, already funded, and spread across programs that the Pentagon is unlikely to walk away from lightly. The company is also leaning into a step-up in internal investment during 2026 to expand production capacity and accelerate technology development, which matters because defense demand is real, but execution is what separates the prime contractors that merely collect orders from the ones that actually convert them into margin and cash. Financial Score: 98. That’s top‑tier elite—companies at 98 are the gold standard of reliability; the main risks are program slippage, margin pressure on complex platforms, and supply-chain bottlenecks, but the backlog gives Lockheed a wide cushion.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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