With two wars currently raging – Russia/Ukraine and Israel/Palestine – and a third a concern – China/Taiwan – defense stocks make all the sense in the world. If nothing else, they could serve as a hedge in your portfolio against geopolitical escalation. And yet investors seem to have little interest. That’s a mistake IMO.
Lockheed Martin (LMT) reported an excellent 2Q24 this morning (Tuesday). Revenue was +9% and they increased full year guidance across the board. At 18.5x 2024 EPS guidance with a 2.58% dividend shares are attractively priced. It’s hard to see them dropping too much in an increasingly dangerous world and the upside in the case of geopolitical escalation is signficant. 12 month PT: $585.