Lockheed Martin Corporation (NYSE: LMT) is the U.S. government’s largest contractor. Its largest customer is the Defense Department, to which it supplies weapons systems, aircraft, and logistical support. Among its products are the F-35 Lightning II fighter, Sikorsky helicopters, and the Aegis naval weapons system. The company provides data services and space technology to the civilian sector. The company generated $51 billion in annual revenue and $2 billion in net income for 2017. It paid $2.1 billion in dividends.
All of the largest shareholders are large financial institutions. As a Standard & Poor's (S&P) 500 company, Lockheed Martin stock is a required holding for many passively managed index mutual funds or exchange-traded funds (ETFs). Active fund managers appreciate the company’s long history of growth and the steady stream of increasing dividends paid out to Lockheed Martin shareholders. All information on portfolio holdings is based on data reported by the beginning of March 2018.
State Street Corporation
State Street Corporation (NYSE: STT) is a tremendous asset manager and one of the major sponsors of ETFs. The company also offers mutual funds and private institutional investment pools. State Street holds 16.48% of Lockheed Martin common stock in its various portfolios. State Street's investment was at the time worth more than $15.15 billion.
Capital World Investors
Capital Group, based in Los Angeles, California, is one of the world’s largest privately held asset management companies and owns 7.69% of Lockheed Martin stock. The stake was at the time worth more than $7 billion.
The Vanguard Group Inc. is a long-time major proponent of passively managed stock mutual funds. Three of the top 10 mutual fund Lockheed Martin shareholders are passively managed index funds by Vanguard, including Vanguard Total Stock Market Index Fund, Vanguard 500 Index Fund, and Vanguard Institutional Index Fund. Vanguard holds 7.09% of Lockheed Martin stock – a stake worth over $6.5 billion at the time.
With $6.28 trillion in assets under management, BlackRock, Inc. (BLK) is, at least by that measure, the most significant investment management company in the world, publicly traded or otherwise. Boasting a market capitalization of over $87.4 billion, the firm sells mutual funds, exchange-traded funds, and closed-end funds, in addition to other vehicles that focus on objectives ranging from retirement income (the firm’s own branded CoRI funds) to college saving plans. The company holds 6.72% of Lockheed Martin common – worth over $6.1 billion.
Bank of America Corporation
The fifth largest institutional investor is Bank of America, which holds 8.8 million shares, or 3.10% of Lockheed Martin stock, which was worth over $2.8 billion in March of 2018. Bank of America, of course, is one of the largest financial institutions on earth.
The Bottom Line
The company’s aerospace, defense, and data management businesses are still growing, and there is plenty of free cash flow to cover the dividend and management's commitment to continuing the long string of dividend increases. The company announced its first quarter 2018 dividend of $2.00 per share on Jan 29, 2018.