Lockheed Martin vs Northrop Grumman Which Is More Reliable?

Lockheed Martin and Northrop Grumman are two of the largest defense contractors in the world, competing for government contracts and investors' attention. Both companies are highly respected for their innovative technologies and cutting-edge solutions in the aerospace and defense industries. Investors often compare their stocks due to their similar market capitalization and performance trends. Lockheed Martin has a strong global presence, while Northrop Grumman is known for its focus on cybersecurity and unmanned systems. The competition between the two companies continues to drive growth and development in the defense sector.

Lockheed Martin or Northrop Grumman?

When comparing Lockheed Martin and Northrop Grumman, 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 Lockheed Martin and Northrop Grumman.

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. Lockheed Martin has a dividend yield of 2.49%, while Northrop Grumman has a dividend yield of 1.68%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Lockheed Martin reports a 5-year dividend growth of 8.18% year and a payout ratio of 45.66%. On the other hand, Northrop Grumman reports a 5-year dividend growth of 9.33% year and a payout ratio of 49.22%.

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 Lockheed Martin P/E ratio at 18.25 and Northrop Grumman's P/E ratio at 29.56. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Lockheed Martin P/B ratio is 16.92 while Northrop Grumman's P/B ratio is 4.76.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Lockheed Martin has seen a 5-year revenue growth of 0.43%, while Northrop Grumman's is 0.50%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Lockheed Martin's ROE at 99.40% and Northrop Grumman's ROE at 16.36%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $508.10 for Lockheed Martin and $473.29 for Northrop Grumman. Over the past year, Lockheed Martin's prices ranged from $413.92 to $618.95, with a yearly change of 49.53%. Northrop Grumman's prices fluctuated between $418.60 and $555.57, with a yearly change of 32.72%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.