Lockheed Martin Corporation's New Secret Weapon... Isn't a Weapon at All

The most popular military transport in the world: Lockheed Martin's C-130J. Photo: Wikimedia Commons

Lockheed Martin's (NYSE: LMT  ) C-130J Super Hercules is a monster. At 39 feet tall, 113 feet long, and with a 133-foot wingspan, this military transport plane can carry 128 soldiers, 22 tons of cargo, or an entire armored personnel carrier within its capacious hold, and is rugged enough to land them on short, unimproved runways -- then take off again from same. With 1,131 planes in use by 16 nations around the globe, it's hands-down the most popular military transport on the planet.

And now Lockheed Martin is preparing to deploy the C-130J to maintain its dominance in one key segment of the civilian aircraft market as well.

Super Hercules receives honorable discharge to civilian life
Last week, Lockheed announced plans to launch a new commercial aircraft, derived from the uber-successful C-130J. Dubbed the LM-100J, Lockheed says its new civilian variant of the C-130J will be a "civil multi-purpose air freighter capable of rapid and efficient transport of cargo... particularly to austere locations worldwide."

Like the military C-130J, the new LM-100J can take off from and land on "short, unprepared airfields without ground support equipment." Lockheed describes the new plane as ideal for such missions as fighting forest fires, transporting cargo to remote and "austere" locations, and medevac/air ambulance.

Lockheed intends to offer the plane as a modern-day upgrade to its previous civilian plane, the L-100, which was itself based on the original design of the military C-130. More than 100 L-110s were sold over the 28 years the plane was produced. Now, according to Reuters, Lockheed aims to sell at about 75 of the updated LM-100Js -- primarily to mining and oil exploration companies, but also to government agencies and to other commercial customers as well.

A Delta-owned Lockheed L-100 in flight. Photo: Wikimedia Commons

Lacking some of the high-tech avionics and communications equipment installed on its military variant, Lockheed expects to sell the civilian LM-100J for a bit less than the C-130J Super Hercules (which retails for about $70 million). The reported asking price for the LM-100J will be "in the mid-$60-million range." Even so, this appears to make the plane close to a $5 billion opportunity for Lockheed -- before factoring in revenues from maintaining, servicing, and (eventually) selling upgrades on the planes.

For Lockheed Martin, which did $45 billion in business last year, that may not sound like much. But you know what they say -- $5 billion here, $5 billion there, and pretty soon, Lockheed Martin will be making some real money.

Meet Lockheed Martin's new profit driver: The civilian version of the Super Hercules. Source: Lockheed Martin

Oh, and one more thing
Did I mention that Lockheed Martin pays its shareholders a 3.4% dividend yield? Mustn't forget that bit -- because over time, generous dividend-paying stocks like Lockheed can make you rich. While they don't garner the notability of high-flying tech stocks, dividend-paying stocks are also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine.

With this in mind, our analysts sat down to identify the absolute best of the best when it comes torock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.


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Rich Smith

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

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8/31/2015 4:01 PM
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Lockheed Martin Co… CAPS Rating: ****