With nearly $45 billion in annual sales, Lockheed Martin (NYSE:LMT) stock is easily the biggest pure-play defense stock on the planet. Lockheed Martin sells 33% more military equipment in a year than does chief rival Boeing. According to data from S&P Capital IQ, it sells 60% more than do either of Europe's BAE Systems or Airbus (roughly $28 billion apiece).

But is bigger better?

Today we're going to take a quick look at Lockheed Martin not from the perspective of it's being the biggest defense business on the planet (which it clearly is). Instead, we'll be asking whether Lockheed Martin stock is likely to turn into a successful investment for small investors like you and me.

In short, is Lockheed Martin stock one you can ride to riches? Let's find out.

This looks like a "UFO" -- so let's identify it. This is Lockheed Martin's F-35B fighter jet, making its first-ever nighttime vertical landing (aboard the USS Wasp). Photo: Lockheed Martin.

The last manned fighter jet
Roughly four years ago, I argued that when building a portfolio of stocks to hold for the long term, investors would be well advised to reserve a slot in that port for Lockheed Martin stock. And how have the shares fared since then? They're up more than 140%.

Probably the biggest reason for this rise is investor optimism over the prospects for Lockheed Martin's fifth-generation fighter jet, the F-35 Lightning II. At last report, Lockheed had delivered at least 104 of the $100 million-plus just fighters to its customers, and over the next six decades, Lockheed plans to build more than 3,100 F-35s for the U.S. and its allies -- perhaps many more.

Conservative estimates suggest that between the price of the airplanes themselves, and the revenues Lockheed will reap from maintaining and servicing them, Lockheed could ultimately reap as much as $1.3 trillion from this program. Over 60 years, that works out to more than $21 billion a year in F-35 revenue, which is enough money to fill up nearly half of Lockheed's annual revenue stream -- and that's if the jets' unit cost falls to its anticipated $80 million. If customers remain willing to pay prices as high as twice that sum, however (as South Korea recently agreed to do in its F-X fighter jet contract), the F-35 could be worth even more money to Lockheed.

The icing on the cake? Lockheed Martin just might have the jet fighter market to itself -- forever. Admiral Mike Mullen, former chairman of the U.S. Joint Chiefs of Staff, predicted that the F-35 will be America's "last manned fighter" jet. If he turns out to be right about that, and if Lockheed Martin never again has to worry about competing with another rival for (non-drone) aircraft, then Lockheed quite literally has a "lock" on the fighter jet market going forward.

Green energy from a defense contractor? Sure! Why not? Source: Lockheed Martin.

Lockheed Martin is not afraid to try new things
Lockheed Martin's F-35 franchise insulates the company, to an extent, from the slowdown in defense spending that other defense contractors have endured of late. But Lockheed isn't resting on its laurels. F-35s notwithstanding, the company saw its revenues still tumble 3.9% in 2013 -- and that's not a trend Lockheed Martin management wants to see continue.

Fortunately for Lockheed, the company boasts a balance sheet not overburdened by debt, and strong free cash flows ($4.1 billion over the past year) that it can deploy to grow new businesses -- businesses that may one day yield the kind of revenues that Lockheed may need to replace a shrinking defense business.

In recent months, we've seen Lockheed plant seeds in fields ranging from green energy (such as the "OTEC" oceanic energy station pictured above), to desalination, to natural gas storage (the company's trying to parlay its expertise in rocket fuel tanks into a business building liquefied natural gas storage tanks), to promoting robotics for the civilian industry.

To date, the revenues from such ventures remain minimal. But at least Lockheed is trying -- and the more things it tries, the greater the chance that Lockheed Martin will one day hit upon the "next big thing" idea that generates real revenues for its business.

The power of low expectations
Probably the best reason to wonder whether Lockheed Martin stock might surprise us and keep growing, though -- topping its past year's 40% rise, and even the 140% gain since September 2010 -- is the most counterintuitive: No one expects this to happen, and a lot of folks will be surprised if it does.

In each and every one of the past four quarters, Lockheed Martin has trumped analyst expectations for how much profit it can earn in an era of declining defense sales. On average, Lockheed Martin's profits for the past four quarters have exceeded estimates by about 9%.

Lockheed has achieved this feat in part by deploying its cash flows to buy back stock, reducing its share count, and "concentrating" profits among fewer shares. Since 2009, in fact, Lockheed Martin's share count has fallen by more than 15% -- including a 1.25% shrinkage since just the end of last year. But the company has also done a superb job of controlling costs, and squeezing more profitable pennies out of each revenue dollar it collects.

Over the past 12 months, S&P Capital IQ data shows that Lockheed Martin's gross profit margin topped 11.2%. That's the best number Lockheed Martin has produced -- ever -- going back as far as S&P Capital IQ keeps such records (the year 1992).

It gets an investor to wondering: Maybe, just maybe, the reason Lockheed Martin stock is up so much over the past year is that it deserves to be. And maybe it will even go up a bit more.

On the wings of the F-35, Lockheed Martin stock is flying high. Photo: Lockheed Martin.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Berkshire Hathaway and Lockheed Martin and recommends Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.