Lockheed Martin Corp. (NYSE: LMT) is a top aerospace and defense stock to buy, as many on Wall Street are expecting a very solid continuation of U.S. and foreign defense spending. Employing 112,000, Lockheed Martin engages in the research, design, development, manufacture, integration and sustainment of technology systems, products and services. The company also provides management, engineering, technical, scientific, logistics and information services. Its Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles and related technologies.
The company reported first-quarter earnings per share (EPS) of $2.58 on $11.7 billion in revenue. That compares to consensus estimates from Thomson Reuters of $2.59 in EPS on revenue of $11.34 billion. In the same period of the previous year, it posted EPS of $2.74 and $10.11 billion in revenue. In terms of guidance, the outlook for the 2016 full year changed only slightly from the previous levels. The company now expects full-year EPS in the range of $11.50 to $11.80 and revenues in the range of $49.6 billion to $51.1 billion.
Lockheed Martin recently was awarded a $1.27 billion contract for the delivery of 13 F-35 Lightning II aircraft. Six F-35Bs will be going to the Marine Corps, three F-35As to the Air Force and four F-35Cs to the Navy.
Lockheed Martin investors receive a 2.8% dividend. Merrill Lynch has a $265 price target. The consensus target is $240.69, and the stock closed Tuesday at $234.70.
The fast-food giant has been on fire over the past six months, but it still remains a solid pick for investors seeking dividends and a degree of safety. McDonald’s Corp. (NYSE: MCD) is the world’s leading global foodservice retailer, with over 36,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local business persons.
Wall Street as a whole is very pleased with the efforts from new CEO Stephen Easterbrook. He is taken the bull by the horns with a strategic corporate reset by changing the menu, updating the hours breakfast is served and modernizing the restaurants. Management prioritized that dividend growth as a key element of its shareholder value proposition. McDonald’s has increased its dividend every year for the past 39 years.
The company reported outstanding first-quarter results in April, generating higher sales, revenues and operating income in constant currencies across all business segments. Hedge funds are very bullish on the company as a total of 20 own the stock.
McDonald’s investors receive a 2.77% dividend. The Merrill Lynch price target is $143, and consensus target is $132.14 The stock closed Tuesday at $128.40.
Stocks still remain the place to be, with yields hovering at multiyear lows. Moving to safer stocks from momentum makes sense with the potential volatility the political races and other headline issues could force into the markets this summer.