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3 Reasons to Buy Lockheed Martin Today

By Dave Mock – Updated Apr 6, 2017 at 12:49PM

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There are lots, but here are three biggies.

Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's recent mess surely qualifies. And though defense conglomerate Lockheed Martin (NYSE: LMT) has already snapped back from recessionary lows, many investors expect even better times ahead.

In our Motley Fool CAPS community, about 94% of the 1,600 investors rating the company are bullish, so there's no shortage of reasons why Lockheed Martin will thrive, three of which I've highlighted below.

But here at The Motley Fool, we're all for looking at both the good and the bad sides of an investment. Once you're done with this article, you can read the case against the stock, weigh in with your own comments below or rate Lockheed Martin yourself in CAPS.

1. Lucrative contracts
Many of Lockheed's contracts involve big money, translating into significant revenue that sometimes runs for decades. The company recently picked up a reinstated $5 billion contract that it had lost to L-3 Communications (NYSE: LLL) last June, and Lockheed plans to bid against a Raytheon (NYSE: RTN) and Boeing (NYSE: BA) team for a Joint Air-to-Ground Missile program worth several billion dollars. With its F-35 Lightning II program potentially generating $1 trillion in sales over its life, investors expect the cash to keep flowing for many years.

2. Strong military spending
Although a tighter military budget has spooked some defense sector investors, some still expect U.S. military spending to grow. Some evidence supports this thinking -- soaring sales in Oshkosh's (NYSE: OSK) defense segment helped it turn a fiscal second-quarter profit, and a recent study by Swedish firm Sipri suggests that the U.S. will continue to be a driver of global military spending even as it scales back in the Middle East.

3. International sales
Lockheed expects to expand its international sales this year, with significant potential in the Middle East and Asia. Some other defense companies hold a similar objective:  UAV (unmanned aerial vehicle) maker Textron (NYSE: TXT) recently experienced an increase in international orders, and General Dynamics (NYSE: GD) expects its combat systems segment's international business to continue to grow as well.

To see details of what CAPS members are saying now about Lockheed Martin, just click on over to Motley Fool CAPS and have a look -- or add your own thoughts directly to this story in the comments box below.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 56 points on average, take a free 30-day trial.

Fool contributor Dave Mock can think of hundreds of reasons why dollar slots suck. He doesn't own shares of companies mentioned here. General Dynamics is an Inside Value pick. The Fool's disclosure policy once auditioned for the Banana Splits, but forgot the words to the theme song.

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Stocks Mentioned

Lockheed Martin Corporation Stock Quote
Lockheed Martin Corporation
LMT
$413.07 (-2.13%) $-9.01
The Boeing Company Stock Quote
The Boeing Company
BA
$131.26 (-5.37%) $-7.45
Oshkosh Corporation Stock Quote
Oshkosh Corporation
OSK
$71.94 (-2.56%) $-1.89
Textron Inc. Stock Quote
Textron Inc.
TXT
$59.43 (-2.69%) $-1.64
L3 Technologies, Inc. Stock Quote
L3 Technologies, Inc.
LLL
General Dynamics Corporation Stock Quote
General Dynamics Corporation
GD
$221.90 (-2.71%) $-6.19
Raytheon Company Stock Quote
Raytheon Company
RTN

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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