How Lockheed Martin’s (LMT) New Dividend Hike and Buyback Authorization Has Changed Its Investment Story

• The Lockheed Martin board of directors has authorized a fourth quarter 2025 dividend of US$3.45 per share, a US$0.15 or 5% increase over the last quarter, payable on December 30, 2025, to holders of record as of December 1, 2025; this marks the company’s 23rd consecutive year of dividend increases and follows an additional US$2 billion expansion in its equity buyback plan.
• These moves highlight Lockheed Martin’s ongoing commitment to shareholder returns, reflecting confidence in its financial position even as it faces operational and earnings challenges.
• We’ll examine how the latest dividend hike and expanded buyback authorization impact Lockheed Martin’s broader investment narrative and risk outlook.

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Lockheed Martin Investment Narrative Recap

To be a Lockheed Martin shareholder, you have to believe that global demand for advanced defense technologies will continue to drive orders and support long-term revenue growth, despite recent operational challenges. The recent dividend increase and expanded buyback plan signal management’s confidence, but they do not materially change the immediate risk tied to further profit compression from fixed-price contract overruns, nor do they serve as major short-term catalysts for share price movement.

Among Lockheed Martin’s latest announcements, the introduction of the Vectis collaborative combat aircraft stands out. This launch reinforces the company’s bid to address ongoing demand for next-generation combat platforms, directly linking to its key catalyst: anticipated large-scale defense orders from global customers seeking advanced air dominance capabilities.

On the other hand, investors should be aware that as management highlights confidence with higher dividends, questions remain over the persistent challenge of cost overruns on legacy programs and how that could impact…

Read the full narrative on Lockheed Martin (it's free!)

Lockheed Martin's narrative projects $81.0 billion revenue and $7.1 billion earnings by 2028. This requires 4.1% yearly revenue growth and a $2.9 billion earnings increase from $4.2 billion.

Uncover how Lockheed Martin's forecasts yield a $493.71 fair value, a 3% downside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have published 28 fair value estimates for Lockheed Martin, ranging from US$374.25 to US$571.70. While optimism around demand for next-gen platforms features in many outlooks, the potential for profit compression from ongoing contract risks is an issue that could shape future results.

Explore 28 other fair value estimates on Lockheed Martin - why the stock might be worth as much as 13% more than the current price!

Build Your Own Lockheed Martin Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Lockheed Martin research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Lockheed Martin research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Lockheed Martin's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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