LMT
Lockheed Martin
Dividend / Cash flow
★ Quality 65/100Price today
$525.28
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A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
What this business is made of
The business
Sells the fighter jet, but charges for parts and support for 40 years.
Lockheed Martin builds highly complex weaponry: the F-35 fighter jet, missiles, Sikorsky helicopters and space systems. Its main customer is the Pentagon, which pays for multi-year contracts. It brought in $75.0B in 2025, with the F-35 as its backbone.
Few companies in the world can build a fifth-generation fighter jet, and the U.S. government doesn't switch suppliers lightly. The barriers are decades of R&D, national security and brutal switching costs. Once a plane is in an allied fleet, the parts and support get charged for 40 years.
Revenue history
From $67.0B to $75.0B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $75.0B · FY2025
Of every $100 in sales, $93 goes to costs and operations; $7 is left as net profit (7% margin).
Catalysts and risks
U.S. defense budget tops $850B in FY2025, with upward pressure from geopolitics.
F-35 program: backlog that sustains production and maintenance well beyond 2040.
FCF of $6.9B funds buybacks and a dividend that LMT has raised every year for two decades.
Almost total dependence on a single customer: if Congress cuts, LMT feels it directly.
Gross margin of 10% — a fixed-cost contract business where a cost overrun eats your profit.
Debt of $21.7B against $4.1B in cash; little cushion if FCF stumbles.
Charlie's note
“A boring business that prints cash and pays a dividend because nobody else can do what it does. The 10% margin scares off the trigger-happy, but the Pentagon signs off on the moat here.”
Analysis · June 2026
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