Lockheed Martin's (LMT 1.71%) M142 High Mobility Artillery Rocket System -- HIMARS -- has turned into arguably its most popular defense product of the past year -- and one of its most profitable. How popular is HIMARS, you ask? Judge for yourself.

Since shortly after Russian tanks rolled into Ukraine in February of last year, HIMARS orders have been pouring in -- five major deals altogether. Let's see what this might mean for the U.S. defense and aerospace company.

In May of last year, Australia placed a $385 million order for 20 HIMARS systems (and projectiles and related equipment). While that purchase might be a bit of a head-scratcher for a remote island nation, Lockheed's next several HIMARS sales were easily explainable.

In quick succession, two NATO states with Russia on their borders followed Australia's lead in purchasing HIMARS. First came Estonia, spending $500 million to acquire six HIMARS systems (and related equipment, including primarily GMLRS and ATACMS missiles) in July. Next up was Lithuania, laying out $495 million for eight HIMARS (and ammunition) in November. The Netherlands followed suit in February 2023, spending $670 million for 20 HIMARS.

But the biggest order of all actually arrived a week earlier, when Poland went all in on HIMARS -- asking Lockheed Martin to sell it 18 HIMARS launchers, 468 HIMARS "Launcher Loader Module kits," and a whole pile of related equipment besides. The total cost of Poland's purchase: $10 billion.

In each of these five arms deals, all of which were reported to Congress by the Pentagon's Defense Security Cooperation Agency (DSCA) for confirmation over the past year, Lockheed Martin was named as the "principal contractor" that would collect the revenue from the sale -- $12.1 billion in all, or roughly the same amount it would take to buy 150 of Lockheed's equally famous F-35 stealth fighter jets.

Revenue and profits

Selling HIMARS is actually much better business for Lockheed Martin than is selling F-35s. To find out why, let's take a quick look at Lockheed Martin's operating profit margins, as summarized in data from S&P Global Market Intelligence.

It will surprise exactly no one that aeronautics (the division that conducts F-35 sales) is by far the biggest business within the aerospace and defense giant, generating $27.2 billion in sales last year. It's a pretty good business, too, yielding $2.9 billion in operating profits for a very healthy 10.5% operating profit margin.

As profitable a business as aeronautics is, however, it's not Lockheed's most profitable business. That business is "missiles and fire control" -- the unit that conducts HIMARS sales. With $1.6 billion in operating profit generated from $11.9 billion in sales, Lockheed's missiles business is easily its most profitable business per revenue dollar, with an operating profit margin of 13.7%.

Simply put, for every $1 worth of HIMARS that Lockheed sells, the company generates 30% more profit than from an equivalent $1 worth of F-35s sold.

Why it matters to shareholders

So what does this mean for Lockheed shareholders?

One way of looking at it is to say that the more HIMARS Lockheed sells, the bigger and faster its profit margin will grow. With $12.2 billion in HIMARS sales booked since the war in Ukraine began, Lockheed has effectively doubled revenue for its most profitable division, counting only new sales booked for one single weapons system within that division. Looked at another way, Lockheed has added HIMARS orders worth 17% of the company's entire annual revenue in less than one year.

Even if additional, Ukraine-inspired HIMARS sales cease immediately, and things settle right back down to their pre-war pace, this implies that analyst forecasts for only a 7.4% long-term earnings growth rate at Lockheed are probably conservative. If Lockheed continues booking HIMARS sales at anything like their recent rate, Lockheed could well grow a lot faster than 7.4% going forward.

So if you're looking at Lockheed stock right now and thinking that 21.5 times earnings is a bit much to pay for a 7% grower, consider that analysts could very well be wrong about that growth rate. And as soon as they figure out just how big of a deal HIMARS is for Lockheed, they might change their tune.