Yahoo Finance·2026-01-08 14:29Core Insights - Trump's executive order targets defense contractors, prohibiting dividends and buybacks until they invest in production capacity, specifically calling out RTX for prioritizing shareholder returns over military needs [5][6][9] - A proposed $1.5 trillion military budget is expected to benefit major defense contractors like Lockheed Martin, RTX, and General Dynamics, potentially driving revenue growth despite short-term payout restrictions [4][10] Lockheed Martin - Lockheed Martin is the largest defense contractor globally, with a market capitalization of $115 billion and $73.3 billion in sales, returning significant capital to investors through dividends and buybacks [3] - In 2024, Lockheed paid $3.1 billion in dividends and repurchased $3.7 billion in shares, with $2.3 billion in dividends and buybacks reported in the first three quarters of 2025 [3] - The company reported record F-35 deliveries of 191 jets in 2025, driven by strong global demand [1] RTX - RTX is the second-largest defense contractor with a market cap of $249 billion and sales of $86 billion, generating 50% to 60% of its revenue from government contracts [7] - The company has returned substantial capital to shareholders, with dividends of $3.2 billion in 2024 and buybacks of $444 million, but faced criticism for aggressive shareholder rewards [8][9] - Trump's order could halt RTX's payouts and threaten its contract eligibility unless it increases investments in production facilities [9] General Dynamics - General Dynamics has a market cap of $93 billion and $51.5 billion in sales, with nearly 80% of its revenue from government contracts [12] - The company returned approximately $1.5 billion in dividends in 2024 and raised its quarterly dividend to $1.50 per share for 2025, totaling near $1.2 billion [13] - General Dynamics' stock performance was strong, with a 26% gain in 2025, and the proposed defense budget is expected to bolster its diverse operations [14]