Trump Wants Lockheed Martin to Cut Its Dividend. Should You Still Buy LMT Stock or Stay Far Away?

Core Viewpoint - Lockheed Martin (LMT) faces challenges due to President Trump's executive order preventing defense companies from returning capital to shareholders, impacting its dividend yield of approximately 2.67% [1] Group 1: Stock Performance - Lockheed Martin stock has increased nearly 26% compared to its 52-week low [2] - The stock is currently trading at a price-to-sales (P/S) ratio of about 1.59x, indicating it is not particularly expensive to own in 2026 [5] Group 2: Future Prospects - President Trump proposed a significant $1.5 trillion defense budget for fiscal 2027, nearly double the previous year's $850 billion, which could provide robust future revenue opportunities for Lockheed Martin [3] - The Pentagon's recent seven-year contract to triple Patriot missile production to about 2,000 units further enhances long-term revenue potential for defense contractors like Lockheed Martin [4] Group 3: Analyst Sentiment - Lockheed Martin exceeded Street expectations in its latest quarter, leading management to raise its earnings outlook for the full year, which supports a bullish sentiment among analysts [6] - The consensus rating on Lockheed Martin stock remains at "Moderate Buy," with price targets reaching as high as $605, suggesting a potential upside of about 15% [8]