Yahoo Finance·2026-01-21 13:23Core Insights - Lockheed Martin is ramping up production of its PAC-3 MSE missile defense system to 2,000 units per year, supported by a projected $1.5 trillion defense budget, indicating a focus on expensive military hardware [1] - The company delivered a record 191 F-35 Lightning II aircraft in 2025, showcasing its capability to handle increased production of complex designs [2] - Lockheed Martin remains a leader in U.S. defense contracting and is expected to benefit significantly from the anticipated increase in defense spending [3] Group 1: Lockheed Martin - Lockheed Martin has a backlog of nearly $180 billion, making it an attractive investment for both income and stock price appreciation [1] - The company trades at 21 times forward earnings, which is lower than many of its large-cap peers, and has a dividend yield of 2.37% [6] - Lockheed's shares have surged over 20% in early 2026, with technical indicators showing bullish momentum [7] Group 2: Boeing - Boeing is expected to deliver 52 737 MAX aircraft per month by the end of 2026, indicating a recovery in its production capabilities [8] - The company has a backlog exceeding $600 billion, including $76 billion in the defense segment, and reported narrower-than-expected losses in Q3 2025 [9] - Boeing's stock shows bullish technical signals, although it still faces challenges with cash flow and a suspended dividend [10] Group 3: Leidos Holdings - Leidos Holdings is positioned as a value play in the defense sector, focusing on high-margin products for a modernized Pentagon [12] - The company has secured a $455 million contract with the Air Force for cloud computing, aligning with key Pentagon initiatives [14] - Leidos trades at 18 times forward earnings and has shown bullish signals despite market volatility [15]