08-04-2021, 10:53 AM
(This post was last modified: 08-04-2021, 10:54 AM by crimsonghost747.)
Nothing wrong with NOC either, I wouldn't mind owning that one too.
But LMT is actually very well positioned going forward.
-The F-35 is quickly becoming the #1 fighter (in term of aircraft in use) in the world. Yeah, the program had it's issues but name one fighter aircraft that was flawless the second it was put on the production line... I'll wait.
Anyway, the F-35 will be the most commonly used aircraft in the western world and will likely remain that way for a good 20-40 years... this is a multi-decade long project. New aircraft (most countries are still waiting to buy more. Switzerland just signed a deal to buy the F-35. Finland will very likely sign a similar deal towards the end of the year. Middle eastern countries aren't really allowed to buy it yet, that will very likely change at some point paving the way for massive deals), upgrades, updates, spare parts, maintenance contracts etc. This project will be a massive cash generating machine for decades to come.
-Space, the next frontier. Space is heating up, mainly in the commercial side of things. This is what most people do not understand: around 20% of LMT's revenue already comes from space related activities, both civilian and military. It's a rapidly growing sector where LMT is very well positioned to win contracts from both commercial clients as well as the US government. People don't realize it but LMT is a massive player in this field already.
-Check what the Patriot franchise has done to Raytheon. THAAD could do the same to LMT. While this project is not nearly as certain as the F-35, this could be another multi-decade long project with significant international interest.
LMT won't take you to the moon. No wait actually they will literally do that. But what I mean to say is it might not be the fastest grower out there but revenues, EPS, cash flows, dividend will all keep growing steadily for the foreseeable future. Couple that with a starting yield of almost 3% (growing ~10% per year) and a current P/E of ~14... the only real risk here is Uncle Sam making huge cuts to defense spending. I'm ok with that risk!
But LMT is actually very well positioned going forward.
-The F-35 is quickly becoming the #1 fighter (in term of aircraft in use) in the world. Yeah, the program had it's issues but name one fighter aircraft that was flawless the second it was put on the production line... I'll wait.
Anyway, the F-35 will be the most commonly used aircraft in the western world and will likely remain that way for a good 20-40 years... this is a multi-decade long project. New aircraft (most countries are still waiting to buy more. Switzerland just signed a deal to buy the F-35. Finland will very likely sign a similar deal towards the end of the year. Middle eastern countries aren't really allowed to buy it yet, that will very likely change at some point paving the way for massive deals), upgrades, updates, spare parts, maintenance contracts etc. This project will be a massive cash generating machine for decades to come. -Space, the next frontier. Space is heating up, mainly in the commercial side of things. This is what most people do not understand: around 20% of LMT's revenue already comes from space related activities, both civilian and military. It's a rapidly growing sector where LMT is very well positioned to win contracts from both commercial clients as well as the US government. People don't realize it but LMT is a massive player in this field already.
-Check what the Patriot franchise has done to Raytheon. THAAD could do the same to LMT. While this project is not nearly as certain as the F-35, this could be another multi-decade long project with significant international interest.
LMT won't take you to the moon. No wait actually they will literally do that. But what I mean to say is it might not be the fastest grower out there but revenues, EPS, cash flows, dividend will all keep growing steadily for the foreseeable future. Couple that with a starting yield of almost 3% (growing ~10% per year) and a current P/E of ~14... the only real risk here is Uncle Sam making huge cuts to defense spending. I'm ok with that risk!