Sushree Mohanty

Wed, Jun 25, 2025, 8:02 AM5 min read

Defense stocks are attracting investor interest in a world marked by rising geopolitical instability, intensifying military activity and a renewed emphasis on national security.

Among the numerous defense companies, Lockheed Martin Corporation (LMT) stands out as a top defense stock, with both strategic relevance and long-term growth potential. As one of the world’s largest defense contractors and a key U.S. Department of Defense supplier, Lockheed Martin is at the forefront of developing cutting-edge fighter jets, missile systems, and space technology. Its extensive defense portfolio and long-term government contracts make it a dependable and potentially rewarding stock for investors seeking stability and growth in the face of geopolitical uncertainty.

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Lockheed Martin stock has returned nearly 150% in the last 10 years. So far this year, the stock is down 5.3% compared to the broader market’s 3.8% gain, making now an excellent time to buy this exceptional stock on the dip.

Valued at $107.8 billion, Lockheed Martin is consistently regarded as one of the world’s largest defense contractors and the leading recipient of U.S. Department of Defense (DoD) contracts. The company operates in four primary business segments:

1. Aeronautics: It is the company’s largest and most iconic division, accounting for nearly 40% of total revenue. The segment is divided into four business lines: tactical aircraft, airlift, sustainment, and aeronautical research and development.

2. Missiles and Fire Control (MFC): This division creates advanced weapons, precision strike systems, close combat weapon systems, and air and missile defense systems.

3. Rotary and Mission Systems (RMS): This category includes naval and radar systems, integrated defense solutions, and helicopters. RMS supports a variety of mission types in the air, sea, and cyber domains.

4. Space: The space division is responsible for satellite systems, space exploration vehicles, and missile warning systems.

One of the most obvious consequences of rising global tensions is an increase in defense spending, which is working to Lockheed Martin’s advantage. The company started 2025 on a strong note, with a 4% increase in sales in the first quarter to $17.9 billion, extending a two-year growth trend in sales. Net earnings increased 14% to $7.28 per share.