Lockheed martin Final Presentation

ABout

  • Lockheed Martin is the largest defense contractor in the world
  • Founded in 1995
  • Traded as LMT on the NYSE, and currently is priced at $268.00 (Closing price on 4/13)
  • LMT works in Aeronautics, Information Systems & Global Solutions, Missiles and Fire Control, Mission Systems and Training, and Space Systems

Strengths

  • The largest company in the Defense Industry
  • Revenues of $45,000 million or more in every year from 2013-2015
  • Net Profit margin of 6.57%, 7.93%, and 7.81% in 2013, 2014, and 2015. Industry average 5.67%
  • 99% of revenue is from contracts, thus LMT has great amount of permanent income

Weaknesses

  • Poor Debt to Equity
  • 6.36, 9.90, and 14.86 in 2013, 2014, and 2015
  • Possible poor cash flow management
  • Decrease in Cash Balance of 44.75% from 2013 to 2014 and decrease of 24.62% from 2014 to 2015

Projections

  • In November of 2015, LMT acquired Sikorsky, who designs and manufactures military and commercial helicopters, for $9 billion
  • This acquisition could allow LMT to expand their commercial business beyond a mere 1% of total sales
  • Many of LMT's numbers did not grow from 2014 to 2015, but because of this acquisition that is not a major concern
  • However, moving forward, LMT should see major growth in sales because of this acquisition

Final Synopsis

  • LMT opened at $93.79 on Jan. 1, 2013 and closed at $217.15 on Dec. 31, 2015
  • LMT also paid dividends ranging from $1.15 to $1.65 every quarter in this time period.
  • With Lockheed Martin's excellent earnings quality, great reputation in their industry, and new acquisition of Sikorsky, this growth can easily continue.
  • Although LMT is currently extremely highly debt leveraged, and had continual decreases in cash, they still seem to be performing extremely well
  • I believe LMT will continue to grow at a significant pace, and will eventually correct these questionable qualities within their business.

Credits:

Created with images by chaz jackson - "Lockheed Martin C-130J Hercules" • Janitors - "Lockheed C-5M Super Galaxy delivering Sikorsky Blackhawks to Riga airport" • skeeze - "jet silhouette aircraft" • André Gustavo Stumpf - "7°/8° GAv/PARA-SAR" • Eric__I_E - "NYSE"

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