Lockheed Martin Corporation (LMT): A Bull Case Theory

We came across a bullish thesis on Lockheed Martin Corporation on Dividendology’s Substack. In this article, we will summarize the bulls’ thesis on LMT. Lockheed Martin Corporation's share was trading at $428.24 as of August 5^th. LMT’s trailing and forward P/E were 24.03 and 17.95, respectively according to Yahoo Finance.

Lockheed Martin stands as one of the most prominent defense contractors globally, renowned for its F-35 fighter jets, missile defense systems, and Black Hawk helicopters. The company offers a unique position as a defensive investment in an otherwise volatile stock market. While some investors seek to capitalize on market fluctuations, others prioritize stability and predictable cash flows—qualities that Lockheed Martin delivers consistently.

Approximately 92.5% of its revenue is derived from government contracts, primarily with the U.S., providing a strong foundation of security and reliability. Further reinforcing this stability is a record backlog exceeding $166 billion in signed contracts, ensuring predictable revenue streams and visibility into future earnings. This robust pipeline underpins Lockheed Martin’s ability to generate steady cash flows, sustain operations, and continue its long-standing commitment to shareholder returns.

The company has increased its dividend for over 22 consecutive years, reflecting financial discipline and resilience. Currently, Lockheed Martin offers a dividend yield of about 3.14%, complemented by an average share buyback yield of 3.3%, making it an attractive option for income-oriented investors. This combination of predictable government-driven revenue, strong backlog, and consistent capital returns positions Lockheed Martin as a reliable choice for those seeking stability and long-term value amid broader market uncertainty.

Previously, we covered a bullish thesis on Lockheed Martin Corporation (LMT) by Steve Wagner in April 2025, which highlighted strong Q1 results, a $173 billion backlog, and strategic ISR expansion. The stock has depreciated about 8.3% since then due to market volatility. The thesis still stands as fundamentals remain solid. Dividendology shares a similar view but emphasizes defensive positioning, stable cash flows, and consistent shareholder returns.

Lockheed Martin Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held LMT at the end of the first quarter which was 65 in the previous quarter. While we acknowledge the potential of LMT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.