How Lockheed Martin’s 5 Percent Dividend Hike and Increased Buybacks Could Influence LMT’s Long-Term Outlook

• The board of Lockheed Martin has authorized a fourth quarter 2025 dividend of US$3.45 per share, a US$0.15 or 5% increase compared to the previous quarter, marking the company’s 23rd consecutive year of dividend growth; the board also approved an additional US$2 billion for share repurchases, bringing total authorization to US$9.1 billion.

• These actions highlight consistent capital returns to shareholders and signal Lockheed Martin’s confidence in its cash flow and long-term financial stability.

• Now, we’ll examine how the expanded dividend and buyback plan factor into Lockheed Martin’s outlook for sustainable growth and earnings potential.

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To be a Lockheed Martin shareholder, you need confidence in long-term demand for advanced defense platforms and consistent government spending, both in the US and internationally. The fresh dividend hike and expanded buyback program reinforce shareholder returns but have limited impact on the most important near-term catalyst: ongoing contract wins from US and allied governments. However, the biggest risk, future profit drag from large, complex defense programs with past cost overruns, remains largely unchanged by this announcement.

Among Lockheed Martin’s recent news, the upcoming third-quarter earnings release on October 21 stands out. This event is especially relevant since analysts are forecasting a year-over-year earnings decline, highlighting how program delays and overruns continue to weigh on quarterly results despite positive signals around capital returns to shareholders.

In contrast, investors should be aware that persistent cost overruns on legacy contracts continue to pose a risk to future earnings, especially if…

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Lockheed Martin’s outlook anticipates $81.0 billion in revenue and $7.1 billion in earnings by 2028. This implies an annual revenue growth rate of 4.1% and a $2.9 billion increase in earnings from the current $4.2 billion level.

Uncover how Lockheed Martin’s forecasts yield a $493.71 fair value, in line with its current price.

Across 28 fair value forecasts from the Simply Wall St Community, investor estimates range from US$374 to US$572 per share. With cost overruns on fixed-price contracts still a key risk, these diverse viewpoints highlight how company challenges can influence perceptions of value and performance.

Explore 28 other fair value estimates on Lockheed Martin – why the stock might be worth as much as 13% more than the current price!

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include LMT.

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