Don't look now, but the most popular military aircraft in the world -- that is not a fighter jet -- just got even more popular.

Lockheed Martin's C-130 Hercules isn't a fighter jet, but it sometimes acts like one. Image source: U.S. Air Force.

The best versus the rest
Priced at less than 19 times earnings, Lockheed Martin (NYSE:LMT) stock is cheaper than the average stock in the Aerospace and Defense Products and Services industry (at least according to data from our friends at Yahoo! Finance). That's probably in part due to the fact that with a projected earnings growth rate of less than 7% (also per Yahoo!), Lockheed Martin is expected to grow about 5 percentage points slower than the average stock in its class over the next five years. And that is probably due to investor worries over the fate of Lockheed Martin's signature product, the F-35 stealth fighter jet.

And yet, what investors may be missing amid all this worrying is that... the F-35 isn't the only aircraft Lockheed Martin builds -- not by a long shot.

F-35 stealth fighters are among Lockheed Martin's most important products, but are not its only products. Image source: Lockheed Martin.

For one thing, two weeks ago, Lockheed Martin officially closed on its purchase of Sikorsky from former owner United Technologies (NYSE:RTX). (By the way, United Technologies is one of the few big ADPS stocks that costs less than Lockheed -- in part because of this Sikorsky deal. Despite the $9 billion it received, I think United Technologies made a big mistake in selling Sikorsky, which dominates the global helicopter market, and builds some of the most popular helicopters in the world.)

But more pertinently today, Lockheed Martin also builds the C-130 Hercules.

Re-introducing the C-130 Hercules
You may recall that last month, we talked a bit about how Lockheed was hip-deep in negotiations with the U.S. Air Force to sell as many as 83 C-130J Super Hercules transport aircraft. Turns out, those negotiations may be bearing fruit.

Last week, the U.S. Pentagon announced that it has awarded Lockheed Martin at least part of the plane order subject to this negotiation, specifically:

  • nine MC-130J Commando II special operations variants of the Super Hercules
  • six C-130J-30s, a stretched version of the basic C-130J
  • one KC-130J aerial refueling tanker
  • and one HC-130J Combat King II "dedicated fixed-wing Personnel Recovery platform"

The HC-130J personnel recovery variant Super Herc is used to airdrop -- and recover -- soldiers in combat zones. Image source: U.S. Air Force.

Tally 'em up, and that's 17 aircraft total. At estimated "flyaway" prices as calculated by the military aviation specialists at BGA-Aeroweb, this implies a purchase price in excess of $1.25 billion.

And that's not all.

Next stop: France
In a separate news item, the U.S. Defense Security Cooperation Agency -- DSCA, the arm of the Pentagon responsible for coordinating foreign arms sales -- just notified Congress of plans to sell to the government of France a weapons package featuring two C-130J transport aircraft and two KC-130J aerial refueling tankers. Throw in 16 Rolls-Royce engines to power the planes (and four more spares), and other necessary equipment, and DSCA valued the sale at $650 million -- all flowing through Lockheed as primary contractor.

The fact that the French sale specifies ordinary C-130Js, rather than the C-130J-30 stretched variant, suggests that this order is not part of the 17-plane order placed by the Pentagon. Also, the fact that France wants to buy two KC-130Js, while the Department of Defense is ordering up only one for itself, lends further proof that we are talking about two distinct orders for aircraft. And the fact that France's all-inclusive package of engines, equipment, and planes appears to be costing it about twice the unit cost, the estimated flyaway cost on the U.S. Air Force's planes suggests that Lockheed Martin is probably making a very tidy profit on its overseas sale.

Final thought
All of this is, of course, great news for Lockheed Martin shareholders -- and here at The Motley Fool, we're all about figuring out what's most important to investors. But what's perhaps most interesting in last week's France deal is the fact that the latter is choosing to buy four transport and refueling birds from Lockheed instead of buying homemade A400M military transports manufactured by Airbus (OTC:EADSY).

On one hand, that's a giant slap in the face for Airbus. (It's also a big financial hit. Despite being Airbus' second-biggest business unit, Airbus Defense is on the ropes financially. According to data from S&P Capital IQ, it earned an operating profit of just 3.1% last year.)

On the other hand, it gets an investor to wondering: If even France is choosing Lockheed Martin planes over Airbuses, then how much longer can Airbus remain in the defense business -- and how much bigger could Lockheed Martin's defense business grow?

I can't help thinking the answers are: not much longer -- and very much bigger.

Lockheed Martin's C-130 HERCULES makes a big contribution to Lockheed's bottom line. Image source: WIKIMEDIA COMMONS.