America’s 15 Biggest Defense Contractors

Source: PRNewsFoto / Leidos

11. Leidos Holdings Inc. (NYSE: LDOS)
> 2017 funding obligations: $4.79 billion
> Market Cap: $8.86 billion
> Total Revenue: $10.17 billion
> Net Income: $366.00 million
> Shares outstanding: 151.46 million
> Employees: approximately 31,000

Leidos’ defense solutions group generated nearly half of the company’s 2017 revenue, but U.S. government contracts accounted for 84% of 2017’s total company revenue. In addition to a variety of security and intelligence systems, Leidos recently bested Raytheon in a competition to build a hosted payload for the Federal Aviation Administration’s Galaxy-30 satellite that will sharpen GPS signals. The company is currently battling Amazon, Google, and other technology and defense firms for a Pentagon cloud contract worth as much as $10 billion. The winner of the Joint Enterprise Defense Infrastructure (JEDI) will create and manage a cloud-based application the military will use to host and distribute mission-critical workloads and classified secrets all over the world. For the current fiscal year, analysts forecast revenue of $10.4 billion and have a 12-month consensus price target on the stock of $77.20.

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12. Aecom (NYSE: ACM)
> 2017 funding obligations: $4.11 billion
> Market Cap: $5.39 billion
> Total Revenue: $18.20 billion
> Net Income: $339 million
> Shares outstanding: 157.62 million
> Employees: 87,000

Like Bechtel, Aecom is an engineering and construction company with a solid, although not dominant, presence in the federal contract world. One of its current showcase projects is a new Mercedes-Benz Stadium in Atlanta that seats up to 83,000 people for NFL and MLS games. For the U.S. government Aecom provides management services programs and facilities, none of which it discusses in any detail. In May, a wholly owned subsidiary won a $3.1 billion cost-plus-award-fee, 15-year contract with the U.S. Air Force for the operation, maintenance, and sustainment of test and training ranges in California, Utah, Nevada, and Colorado. For the current fiscal year, analysts forecast revenue of $19.67 billion and have a 12-month consensus price target on the stock of $40.54.

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13. Booz Allen Hamilton Holding Corp. (NYSE: BAH)
> 2017 funding obligations: $4.09 billion
> Market Cap: $6.42 billion
> Total Revenue: $6.17 billion
> Net Income: $$305.11 million
> Shares outstanding: 5.29 billion
> Employees: approximately 24,600

Booz Allen provides a variety of management and technology consulting services to governments, corporations, and nonprofits worldwide. The company began working with the U.S. Navy in 1940, and the Navy remains its largest client. Work for the Defense Department accounted for 46% of its fiscal year revenue. Booz Allen also provides mission-critical support for the International Space Station and assists commercial and government clients with cyber threats. At least one incident the company would like to forget is its hiring of NSA documents leaker Edward Snowden as a contractor in 2013. For the current fiscal year, analysts forecast revenue of $6.6 billion and have a 12-month consensus price target on the stock of $49.10.

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14. Humana Inc.
> 2017 funding obligations: $3.72 billion
> Market Cap: $41.18 billion
> Total Revenue: $53.77 billion
> Net Income: $2.45 billion
> Shares outstanding: 137.68 million
> Employees: approximately 45,900

Humana is one of the country’s largest health insurers, and the company offers administrative services to the Department of Defense through its Tricare program. Beginning in 2016, the company began providing services to about 6 million program beneficiaries in 32 states, with delivery of health care services beginning in January of this year. The five-year contract expires at the end of 2022 and may be renewed at the government’s option. Humana reported military enrollment totaling nearly 3.1 million at the end of 2017. For the current fiscal year, analysts forecast revenue of $56.29 billion and have a 12-month consensus price target on the stock of $316.44.

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15. Science Applications International Corp. (NYSE: SAIC)
> 2017 funding obligations: $3.46 billion
> Market Cap: $3.45 billion
> Total Revenue: $4.45 billion
> Net Income: $179.00 million
> Shares outstanding: 42.28 million
> Employees: more than 15,000

SAIC is a pure-play technical services provider to the U.S. government and is the prime contractor of 91% of what the company calls “premier” contract vehicles. These are basically open-ended federal contracts that allow prime contractors to collect a fee for matching a vendor with a government agency. SAIC lists 14 federal contract vehicles under its management, including one to provide advice and assistance to the Army’s Aviation and Missile Command and another to provide IT solutions to the Department of Homeland Security. Even though SAIC lost the bidding for a Marine Corps amphibious combat vehicle to BAE this month, last November the company won a one-year, $980 million Army battlefield systems contract that is renewable for two additional years. For the current fiscal year, analysts forecast revenue of $56.29 billion and have a 12-month consensus price target on the stock of $89.67.