Can Lockheed Martin Continue to Grow?

Founded in 1912, Lockheed Martin (LMT) has a well-documented history of both earnings and dividend growth. In fact, the company has been able to raise its dividend payout every year for the past decade, growing it at an average annual rate of 20.6%. Still, there are legitimate concerns regarding future growth. While budgetary pressures surrounding the U.S. government remain a risk, there are a few tailwinds that should mitigate much of this impact over the long term.

With a dividend history stretching back to the previous century and plenty of underappreciated growth drivers over the next few decades, investors can rest easy with Lockheed Martin's growth prospects and valuation. It looks like all of the major defense companies are trading at a discount to the market's current P/E of 21x. While there will be plenty of headline risk, the current valuation just doesn't match up with the earnings power of Lockheed Martin. Even with spending pressure from its main customer, there are still plenty of drivers that should keep earnings growth intact. It's a bit of a contrarian pick, but shares look like a value right now.

Source: Guru Focus

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