Canada Commits to Investing Over $14 Billion in US-Made Lockheed Martin F-35 Fighter Jets
January 17, 2023
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The company is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products, and services. It is one of the world’s largest defense contractors and is a major contributor to the US defense industry. Canada’s decision to purchase 88 F-35 fighter jets from Lockheed Martin ($NYSE:LMT) comes after a lengthy and contentious endeavor to upgrade its aging fleet. The deal is estimated to cost 19 billion Canadian dollars – equivalent to over $14 billion American dollars – and is expected to boost Lockheed Martin’s presence in the international market. The F-35 fighter jet is the most advanced fighter jet in the US arsenal. It has been designed to engage in air-to-air combat, air-to-ground combat, and intelligence, surveillance, and reconnaissance missions with unparalleled efficiency.
The purchase of the F-35s is part of Canada’s larger efforts to enhance its defense capabilities. With this procurement, it will become the first foreign customer for Lockheed Martin’s F-35 fighter jets. This investment is expected to create hundreds of jobs in Canada over the next decade and will help to strengthen the country’s defense capabilities. For Canada, it signals the country’s commitment to modernizing its defense forces and protecting its citizens. For Lockheed Martin, it is a testament to their world-class engineering and manufacturing capabilities.
Stock Price
On Monday, Canada announced its commitment to invest over $14 billion in the US-made Lockheed Martin F-35 fighter jets. This news has been met with largely positive sentiment, as this investment will be an asset to the Canadian military. At the same time, investors have reacted differently to this news. Although Lockheed Martin stock opened at $467.8 on Monday, it closed at $459.0, down by 3.0% from prior closing price of $473.2. This decrease could be attributed to market uncertainty, as investments of this size come with significant risk. Nevertheless, Canada’s investment in the F-35s is indicative of its commitment to modernizing its military capabilities. This move comes at a time when the Canadian government is looking for ways to better prepare for potential threats. The F-35s will help improve Canada’s air defense system, allowing it to better protect its airspace. The acquisition of these F-35s from Lockheed Martin will also be beneficial for US-Canada relations. Lockheed Martin is one of the largest defense contractors in the US, so this investment will provide much-needed support to its operations.
Additionally, it will help strengthen the ties between the two nations, which have been strained in recent years. While the impact of the news has been mixed in terms of market sentiment, it is clear that this investment will be beneficial in the long term for both Canada and the US. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Lockheed Martin. More…
| Total Revenues | Net Income | Net Margin |
| 64.72k | 5.87k | 9.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Lockheed Martin. More…
| Operations | Investing | Financing |
| 10.14k | -1.52k | -8.92k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Lockheed Martin. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 52.03k | 40.06k | 43.11 |
Key Ratios Snapshot
Some of the financial key ratios for Lockheed Martin are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 3.5% | 0.7% | 11.7% |
| FCF Margin | ROE | ROA |
| 13.2% | 40.3% | 9.1% |
VI Analysis
LOCKHEED MARTIN is classified as a “cow” company, according to the VI Star Chart. This means that it has a track record of regularly paying out consistent and sustainable dividends. Such companies are of interest to investors looking for steady returns from their investments. The company is strong in profitability and dividend payouts, but weak in asset and growth. However, its high health score of 8/10 with regard to its cashflows and debt, suggests that it is capable of sustaining its operations during times of crisis. Furthermore, the company’s fundamentals reflect its long term potential. This includes its financial position, product offerings, and market share. The company’s financials show that it is able to generate a steady stream of revenue and profits, which allows it to pay out dividends and reinvest in the business. Additionally, its product offerings are well-received in the market and its market share is growing. Overall, LOCKHEED MARTIN is an attractive investment option for investors looking for consistent and sustainable dividend payments. Its solid fundamentals also demonstrate that it has the potential to continue to grow and expand in the future. More…
VI Peers
The U.S. Department of Defense (DoD) spends billions of dollars on weapons systems each year. Major weapons systems contractors compete for these funds. The competition among these companies is fierce. The companies must not only offer the best products, but they must also be able to demonstrate to the DoD that their products are superior to those of their competitors.
Lockheed Martin Corp is one of the largest weapons systems contractors in the United States. The company’s main competitors are Northrop Grumman Corp, Ballistic Recovery Systems Inc, and LIG Nex1 Co Ltd.
– Northrop Grumman Corp ($NYSE:NOC)
Northrop Grumman Corp is an American aerospace and defense technology company with a market cap of 78.41B as of 2022. The company has a Return on Equity of 34.54%. Northrop Grumman Corp is a leading provider of aircraft, logistics, and technology solutions for the U.S. military, government, and commercial customers. The company’s products and services include aircraft, space systems, missiles, electronics, and technical services.
– Ballistic Recovery Systems Inc ($OTCPK:BRSI)
Ballistic Recovery Systems Inc is a world leader in the design, manufacture, and deployment of parachutes and other soft goods for the aerospace industry. The company has a market cap of 4.19M as of 2022 and a ROE of -159.06%. Ballistic Recovery Systems Inc is a publicly traded company on the Nasdaq Stock Market under the ticker symbol BRS.
– LIG Nex1 Co Ltd ($KOSE:079550)
LIG Nex1 Co Ltd is a South Korean defense company specializing in electronics and weaponry. It was founded in 1999 and is headquartered in Seoul. The company has a market cap of 1.87T as of 2022 and a Return on Equity of 14.92%. LIG Nex1 Co Ltd develops, manufactures, and supplies electronics and weapons products for the military, law enforcement, and commercial markets worldwide. The company’s products include radar systems, sonar systems, electronic warfare systems, communication systems, navigation systems, and missile systems.
Summary
Lockheed Martin announced that the Canadian government has committed to investing over $14 billion in their US-made F-35 fighter jets. The news has been met with mostly positive sentiment, though the stock price fell slightly the same day. In terms of investing, this could be seen as a sign of stability and confidence in the company’s products and services. Investors should take note of the news, as it could signal a potential increase in the company’s value in the near future.
Additionally, investors should research the company’s operations and financial health before making any decisions.
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