Here's Why You Should Include Leidos Stock in Your Portfolio Right Now

Core Viewpoint - Leidos Holdings, Inc. (LDOS) presents a strong investment opportunity in the Aerospace Defense industry due to rising earnings estimates, robust return on equity (ROE), a solid backlog, and shareholder-friendly initiatives [1] Growth Forecast & Surprise History - The Zacks Consensus Estimate for LDOS' 2025 earnings per share (EPS) has increased by 1.5%, while the estimate for 2026 EPS has risen by 0.7% over the past 30 days [2] - The total revenue estimate for 2025 is $17.11 billion, indicating a growth of 2.7% from 2024, and for 2026, the revenue estimate is $17.66 billion, suggesting a year-over-year increase of 3.3% [2] - LDOS has a long-term earnings growth rate of 7.4% and has surpassed expectations in the last four quarters with an average earnings surprise of 23.71% [3] Rising Backlog - Contract wins from the Pentagon and other U.S. allies for cost-effective military technologies are key revenue sources for Leidos, enhancing its bookings and backlog [4] - The backlog at the end of March 2025 was $46.30 billion, up from $43.55 billion in the prior quarter, indicating improved revenue-generating potential [4] Return on Equity - LDOS has a return on equity (ROE) of 32.62%, significantly higher than the industry average of 9.66%, indicating effective fund utilization [5] Solvency & Liquidity - The times interest earned (TIE) ratio for Leidos at the end of Q1 2025 was 10.1, suggesting the company can meet its interest payment obligations without difficulty [6] - The current ratio was 1.54, indicating the company can meet its short-term liabilities effectively [6] Shareholder-Friendly Initiatives - Leidos has consistently paid dividends, with a current quarterly dividend of 40 cents per share, leading to an annualized dividend of $1.60 [7] - In Q1 2025, the company paid dividends totaling $53 million, with a current dividend yield of 1.05%, surpassing the sector average of 0.95% [7] - The company repurchased $528 million worth of its shares in Q1, reflecting a year-over-year increase of 188.5% [8] Stock Price Performance - Over the past three months, LDOS shares have increased by 15.8%, outperforming the industry's rise of 7.6% [10]