What Lockheed Martin actually does

Lockheed Martin is the largest US defense contractor. Its best-known product is the F-35 fighter jet, and it also makes missiles and missile defense systems, military helicopters through Sikorsky, and satellites and spacecraft, including parts of NASA’s Orion capsule.

How the business makes money

Almost all revenue comes from government contracts, mainly the US Department of Defense plus allied governments. Programs last for decades and include long support and upgrade work, which gives the company a large backlog and visible revenue.

The dividend story

Lockheed pays a quarterly dividend and has raised it each year for more than two decades. It also buys back shares. Reliable government cash flow supports the payout, but the company pays out a large share of profit.

What to keep an eye on

  • Government budgets. Politics decides spending.
  • F-35 concentration. One program is a big share of sales.
  • Fixed-price contracts. Cost overruns can mean big charges.
  • Supply chain. Parts and labor limits.

Quick take

Lockheed Martin offers a dependable government-funded business and a growing dividend, with concentration and political risk.