For years, investing in defense and aerospace paid off but that changed in the last year. Certification delays for the 737 MAX, made by Boeing (NYSE:BA), is clouding the airplane industry. It is also casting a shadow in well-run companies like Lockheed Martin (NYSE:LMT). The detail-oriented investor will look at the whole picture and realize that LMT stock, which spent much of the last few months in the $400 range, is on the verge of a break-out.
Late last week, Lockheed management announced a few shareholder-friendly moves. This could help shares rebound from here.
Lockheed declared a $2.60 per share dividend, 20 cents higher than last quarter. Shareholders of record as of the close of business on Dec. 1, 2020, will collect the distribution.
The corporation’s board also authorized the buyback of another $1.3 billion of Lockheed stock. The total authorization for future repurchases is now around $3 billion.
Stock buybacks benefit investors because it lowers the share count and increases the earnings per share. In the second quarter, Lockheed posted revenue of $16.22 billion, up 12.43% from last year. Cash from operations topped $2.2 billion, while net earnings topped $5.79 per share.
“I’m pleased to see continued strong operational and financial results this quarter as we remain focused on performing with excellence for our customers,” said Chief Executive Officer James Taiclet.
A Closer Look at LMT Stock
Given the favorable low-interest-rate environment, the company may re-evaluate its debt and go to the debt market to refinance. That would cut interest costs.
To lighten the cost burdens for governments, Lockheed said it cut its