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Should Value Investors Buy Lockheed Martin (LMT) Stock?

Zacks Equity Research
·2-min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Lockheed Martin (LMT). LMT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.61. This compares to its industry's average Forward P/E of 19.16. Over the last 12 months, LMT's Forward P/E has been as high as 15.35 and as low as 12.17, with a median of 14.03.

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Investors should also recognize that LMT has a P/B ratio of 16.36. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. LMT's current P/B looks attractive when compared to its industry's average P/B of 29.63. Over the past 12 months, LMT's P/B has been as high as 29.39 and as low as 14.93, with a median of 17.02.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Lockheed Martin is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LMT feels like a great value stock at the moment.


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