General Dynamics vs Lockheed Martin Which Should You Buy?
General Dynamics and Lockheed Martin are two of the biggest defense contractors in the United States, competing for government contracts in the aerospace and defense industry. Both companies have seen fluctuations in their stock prices due to geopolitical tensions, military conflicts, and global events. Investors often compare the performance of General Dynamics and Lockheed Martin stocks to determine which company offers a more reliable investment opportunity in a volatile and competitive market. Let's take a closer look at the financial performance and highlights of these two industry giants.
General Dynamics or Lockheed Martin?
When comparing General Dynamics and Lockheed Martin, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between General Dynamics and Lockheed Martin.
Dividend Investors:
Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company.
General Dynamics has a dividend yield of 2.16%, while Lockheed Martin has a dividend yield of 2.8%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. General Dynamics reports a 5-year dividend growth of 6.94% year and a payout ratio of 40.43%. On the other hand, Lockheed Martin reports a 5-year dividend growth of 7.21% year and a payout ratio of 57.33%.
Value Investors:
Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with General Dynamics P/E ratio at 19.24 and Lockheed Martin's P/E ratio at 20.36. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. General Dynamics P/B ratio is 3.26 while Lockheed Martin's P/B ratio is 17.16.
Growth Investors:
Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, General Dynamics has seen a 5-year revenue growth of 0.26%, while Lockheed Martin's is 0.41%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with General Dynamics's ROE at 17.10% and Lockheed Martin's ROE at 80.98%.
Retail Investors:
Retail investors often consider stock affordability and company familiarity. For example, day low prices are $251.05 for General Dynamics and $449.37 for Lockheed Martin. Over the past year, General Dynamics's prices ranged from $239.87 to $316.90, with a yearly change of 32.11%. Lockheed Martin's prices fluctuated between $419.70 and $618.95, with a yearly change of 47.47%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.
