General Dynamics and Lockheed Martin: Full Corporate Analysis
Executive Summary
General Dynamics (GD) is a market leader in business aviation; land and expeditionary combat vehicles and systems, armaments, and munitions; shipbuilding and marine systems; and mission-critical information systems and technologies (Gendyn, 2008). Lockheed Martin (LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta (Lockheed, 2008). I have compared both companies under various criteria such as ratio analysis, stock price performance, common size financial statements and then have tried to comment on which is company is better.
The current market price of General Dynamics is $92.46 and the average target price is $100, which represents a premium of around 8% from the current level. On the other hand, the current market price of Lockheed Martin is $117 and the average target price is $124, which implies a premium of around 6%.
From the comparison of both companies based on the financial and market analysis, General Dynamics has been on a growth trend. If an investor wants to invest in a company which has better long term growth, General Dynamics would be a better option as compared to Lockheed Martin. Most of the margin is better for General Dynamics as compared to Lockheed Martin and also growth in sales and earnings before interest and taxes is better for General Dynamics as compared to Lockheed Martin.
Some of the key reasons why General Dynamics should be selected for investment are summarized below:
When both companies are compared based on profitability and margin analysis we can see that General Dynamics is better placed than Lockheed Martin
The liquidity position of General Dynamics is far better than Lockheed Martin and therefore General Dynamics is better placed as compare to Lockheed Martin.
The solvency ratio of General Dynamics is far better than Lockheed and therefore General Dynamics is better placed than Lockheed
General Dynamics (GD) is a market leader in business aviation; land and expeditionary combat vehicles and systems, armaments, and munitions; shipbuilding and marine systems; and mission-critical information systems and technologies (Gendyn, 2008). Lockheed Martin (LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta (Lockheed, 2008). I have compared both companies under various criteria such as ratio analysis, stock price performance, common size financial statements and then have tried to comment on which is company is better.
The current market price of General Dynamics is $92.46 and the average target price is $100, which represents a premium of around 8% from the current level. On the other hand, the current market price of Lockheed Martin is $117 and the average target price is $124, which implies a premium of around 6%.
From the comparison of both companies based on the financial and market analysis, General Dynamics has been on a growth trend. If an investor wants to invest in a company which has better long term growth, General Dynamics would be a better option as compared to Lockheed Martin. Most of the margin is better for General Dynamics as compared to Lockheed Martin and also growth in sales and earnings before interest and taxes is better for General Dynamics as compared to Lockheed Martin.
Some of the key reasons why General Dynamics should be selected for investment are summarized below:
When both companies are compared based on profitability and margin analysis we can see that General Dynamics is better placed than Lockheed Martin
The liquidity position of General Dynamics is far better than Lockheed Martin and therefore General Dynamics is better placed as compare to Lockheed Martin.
The solvency ratio of General Dynamics is far better than Lockheed and therefore General Dynamics is better placed than Lockheed
References: Jelter, Jim (2006). General Dynamics Net Soars 84% Amid Strength at All of Its Units. Wall Street Journal (Eastern Edition), p.A.2. Retrieved August 24, 2008, from ABI/INFORM Global database Donlan, Thomas G. (2007). Still Dynamic After All These Years. Barron’s 87(14), 19. Retrieved August 24,2008, from ABI/INFORM Global database (Document ID: 1249850901) Velocci, Jr., Anthony L (Document ID: 385552571). About Us Common Size Financial Statements (2007). NetMBA. Retrieved August 17, 2008 http://www.netmba.com/finance/statements/common-size/ Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (2008). EDGAR Online Index to Exhibits – General Dynamics Corporation. (2008). EDGAR Online. Retrieve August 17, 2008 from http://sec.edgar-online.com/2001/03/29/0000950133-0 001070/Section 19.asp Lockheed Martin Corporation (LMT). (2008). Yahoo Finance. Retrieved August 17, 2008 from http://finance.yahoo.com NASDAQ COMPOSITE http://finance.yahoo.com SEC Filings (2008) http://investor.shareholder.com/lmt/sec.cfm?DocType= Annual Proxy S&P 500 INDEX, RTH (2008) Stock Analysis Checklist. (2008). Winning Investing.Com. Retrieved August 17, 2008 from http://www.winninginvesting.com/stock_analysis_checklist.htm Investopedia http://www.scribd.com/doc/2673535 General Dynamics (2008) August 28, 2008 from http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=GD