Don't overlook NYSE:LMT—it's a hidden gem with strong fundamentals and an attractive price tag.

Last update: Nov 21, 2023

Our stock screening tool has identified LOCKHEED MARTIN CORP (NYSE:LMT) as an undervalued gem with strong fundamentals. NYSE:LMT boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Exploring NYSE:LMT's Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:LMT was assigned a score of 7 for valuation:

LMT's Price/Earnings ratio is rather cheap when compared to the industry. LMT is cheaper than 90.48% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 24.44. LMT is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio, LMT is valued cheaply inside the industry as 84.13% of the companies are valued more expensively.
Based on the Enterprise Value to EBITDA ratio, LMT is valued cheaply inside the industry as 87.30% of the companies are valued more expensively.
LMT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. LMT is cheaper than 92.06% of the companies in the same industry.
LMT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LMT has an outstanding profitability rating, which may justify a higher PE ratio.

Assessing Profitability for NYSE:LMT

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:LMT has earned a 8 out of 10:

The Return On Assets of LMT (12.29%) is better than 96.83% of its industry peers.
The Return On Equity of LMT (75.11%) is better than 98.41% of its industry peers.
LMT's Return On Invested Capital of 18.47% is amongst the best of the industry. LMT outperforms 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LMT is significantly above the industry average of 7.25%.
LMT has a better Profit Margin (10.29%) than 84.13% of its industry peers.
In the last couple of years the Profit Margin of LMT has grown nicely.
LMT has a better Operating Margin (12.72%) than 84.13% of its industry peers.

Deciphering NYSE:LMT's Health Rating

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:LMT was assigned a score of 6 for health:

LMT has an Altman-Z score of 3.64. This indicates that LMT is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.64, LMT is doing good in the industry, outperforming 71.43% of the companies in the same industry.
LMT has a debt to FCF ratio of 3.00. This is a good value and a sign of high solvency as LMT would need 3.00 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 3.00, LMT belongs to the best of the industry, outperforming 93.65% of the companies in the same industry.

What does the Growth looks like for NYSE:LMT

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:LMT has earned a 4 for growth:

LMT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.67%, which is quite impressive.
Measured over the past years, LMT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.23% on average per year.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of LMT for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.