LMT
Lockheed Martin Corporation
Industrials · Aerospace & Defense · United States · Stock
Theme Exposure
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score of 46.4/100 reflects a mixed picture: a strong dividend track record is offset by declining net income, a heavily leveraged balance sheet, and inconsistent quarterly momentum.
- Revenue growth of 5.6% was rewarded, but the simultaneous 6.0% drop in net income and 3.7% decline in diluted EPS pulled the growth score below the midpoint.
- The thematic alignment with Defense Spending and Space Economy did not fully translate into score uplift under the model's current methodology, limiting the overall composite.
Why Not Higher
- The debt-to-equity ratio of 3.23 and the net income decline of 6.0% in FY2025 weighed heavily on financial health and growth scores, preventing a higher composite result.
- Quarterly earnings volatility — including a net income low of $342 million in 2025Q2 — and the revenue pullback in 2026Q1 kept momentum below the midpoint.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $71,043,000,000 to FY2025's $75,048,000,000, a gain of +5.6%, but net income declined -6.0% from FY2024's $5,336,000,000 to FY2025's $5,017,000,000, and diluted EPS fell -3.7% from FY2024's $22.31 to FY2025's $21.49.
The model rewarded modest top-line expansion but penalized the simultaneous contraction in bottom-line profitability and per-share earnings, producing a below-midpoint score that reflects mixed growth quality.
In FY2025, Lockheed Martin posted a net margin of 6.7%, an operating margin of 10.3%, and a return on assets of 8.4%.
The model recognized solid operating-level profitability and a respectable asset return, while the relatively thin net margin tempered the overall score to a moderate level above the midpoint.
In FY2025, Lockheed Martin carried a debt-to-equity ratio of 3.23 against total assets of $59,840,000,000.
The elevated debt-to-equity ratio of 3.23 in FY2025 signals a heavily leveraged balance sheet, which the model penalized, keeping the score below the midpoint despite the company's substantial asset base.
Quarterly revenue moved from $18,155,000,000 in 2025Q2 to $18,609,000,000 in 2025Q3, peaked at $20,321,000,000 in 2025Q4, then pulled back to $18,021,000,000 in 2026Q1. Operating income followed a similar arc, rising from $748,000,000 in 2025Q2 to $2,331,000,000 in 2025Q4 before easing to $2,063,000,000 in 2026Q1, while net income was notably depressed at $342,000,000 in 2025Q2 before recovering to $1,619,000,000, $1,344,000,000, and $1,488,000,000 in subsequent quarters.
The model observed a pattern of mid-cycle strength followed by a sequential revenue and earnings pullback in the most recent quarter, and the sharp net income weakness in 2025Q2 weighed on the trailing trend, resulting in a below-midpoint momentum score.
Lockheed Martin has grown its dividends per share every year from $11.40 in FY2022 to $12.15 in FY2023, $12.75 in FY2024, and $13.35 in FY2025, while maintaining a dividend payout ratio of 62.4% of net income in FY2025.
The model rewarded the consistent multi-year dividend growth streak and a payout ratio that reflects meaningful income return to shareholders, producing a high score that reflects both yield commitment and sustainability signaled by the filing data.
Lockheed Martin is assigned to the macro themes of Defense Spending and Space Economy.
Although both assigned themes are prominent in current market discourse, the sub-score of 5.0 out of 20 indicates that this thematic assignment did not fully translate into score under the model's current methodology.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Lockheed Martin delivered modest top-line growth of 5.6% in FY2025, with revenue rising to $75.0 billion, but bottom-line results weakened as net income fell 6.0% and diluted EPS declined 3.7%, reflecting mixed growth quality. Profitability metrics show a solid operating margin of 10.3% and return on assets of 8.4%, though the net margin of 6.7% remains relatively thin. The balance sheet carries meaningful leverage with a debt-to-equity ratio of 3.23, and quarterly momentum showed a revenue and earnings pullback in the most recent period. A consistent multi-year dividend growth streak from $11.40 in FY2022 to $13.35 in FY2025 stands out as a clear positive for income-oriented investors.
Plain English
Lockheed Martin is bringing in more revenue each year, but its profits are actually shrinking, it carries a lot of debt, and its most recent quarter showed a dip — though it does keep raising its dividend every year, which is a reliable bright spot.
Bull Case vs. Bear Case
Bull Case
- Lockheed Martin has grown its dividend every year from $11.40 in FY2022 to $13.35 in FY2025, demonstrating a consistent commitment to returning cash to shareholders.
- The company posted a 10.3% operating margin and 8.4% return on assets in FY2025, indicating solid operational efficiency relative to its asset base.
- Revenue expanded 5.6% year-over-year to $75.0 billion in FY2025, showing the company's ability to grow its top line within the Defense Spending and Space Economy themes.
Bear Case
- Net income fell 6.0% and diluted EPS dropped 3.7% in FY2025 despite revenue growth, signaling that profitability is not keeping pace with the top line.
- A debt-to-equity ratio of 3.23 in FY2025 reflects a heavily leveraged balance sheet that introduces financial risk, particularly in a rising-rate environment.
- Quarterly revenue pulled back to $18.0 billion in 2026Q1 after peaking at $20.3 billion in 2025Q4, and net income was severely depressed at $342 million in 2025Q2, highlighting earnings volatility.
What Could Change the Picture
Bullish Triggers
- A sustained recovery in quarterly net income above the 2025Q2 trough of $342 million — with 2026Q1 reaching $1.49 billion — could signal that the earnings weakness was temporary rather than structural.
- Continued annual dividend increases, now at $13.35 per share in FY2025, alongside a manageable 62.4% payout ratio, suggest the company has room to sustain shareholder returns even under earnings pressure.
Bearish Triggers
- If the sequential revenue decline from $20.3 billion in 2025Q4 to $18.0 billion in 2026Q1 persists, it could indicate that the mid-cycle peak has passed and growth momentum is fading.
- A further widening of the debt-to-equity ratio beyond 3.23 would deepen balance sheet concerns and could constrain the company's financial flexibility.
Risk Profile
High RiskLockheed Martin's debt-to-equity ratio of 3.23 in FY2025 signals a heavily leveraged balance sheet that amplifies financial risk. Compounding this, quarterly net income swung from a low of $342 million in 2025Q2 to $1.62 billion in 2025Q3 before easing again, reflecting meaningful earnings volatility that adds to the High risk rating.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.