For Whom the Bell Tolls – The Current Ownership Structure of Lockheed Martin Corporation (NYSE:LMT)

Between current inflation, political uncertainty and the biggest military conflict in years Lockheed Martin Company (NYSE: LMT) has emerged as one of the clear winners in the market.

It has outperformed significantly since the start of the year, and it looks like neither the failed acquisition nor China’s sanctions will reverse that trend.

See our latest analysis for Lockheed Martin

Latest developments

Despite its best efforts, Lockheed Martin had to drop plans to buy Aerojet Rocketdyne (NYSE: AJRD) after the Federal Trade Commission sued to block the $4.4 billion deal of dollars. Aerojet, which is down more than 20% year-to-date, will likely find a new buyer – possibly from the private equity industry.

Meanwhile, China is impose new sanctions on Lockheed Martin and Raytheon Technologies because of their arms sales to Taiwan. The latest deal involves a contract worth $100 million to maintain Taiwan’s missile defense systems. China argues that US arms sales to Taiwan violate agreements between Beijing and Washington.

New blocked contracts

In recent weeks, the company has signed more than $500 million in new contracts. These include:

  • $315 Million Navy Modification Contract for F-35 Joint Strike Fighter Support Equipment
  • $372 million modification contract for a CH-53k Heavy Lift aircraft
  • $138 million transaction agreement for federation, testing and evaluations of Spike missile system user operations.

Who currently owns Lockheed Martin?

Lockheed Martin is a pretty big company. It has a market capitalization of US$106 billion. Typically, institutions own a significant share of a business of this size. In the table below, we can see that the institutions own shares in the company.

NYSE: LMT Ownership Breakdown February 24, 2022

What does institutional ownership tell us about Lockheed Martin?

Institutions typically measure themselves against a benchmark when reporting to their investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

Lockheed Martin already has institutions on the stock register. Indeed, they hold a good stake in the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors.

So it’s worth checking out Lockheed Martin’s earnings history below.

earnings-and-revenue-growth
NYSE: LMT Earnings and Revenue Growth February 24, 2022

Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. We note that hedge funds have no significant investment in Lockheed Martin. Our data shows that the largest shareholder is State Street Global Advisors, Inc., with 15% of the shares outstanding. The Vanguard Group, Inc. is the second-largest shareholder with 7.7% of the common stock, and Capital Research and Management Company owns approximately 6.7% of the company’s stock.

A closer look at our ownership figures suggests that the top 16 shareholders hold a combined ownership of 50%, implying that no single shareholder has a majority.

Insider ownership of Lockheed Martin

The definition of an insider may differ slightly from country to country, but board members still matter. Management ultimately answers to the board. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Insider ownership is generally a good thing. However, it is more difficult for other shareholders to hold the board accountable for decisions on some occasions.

Our recent data indicates that insiders own less than 1% of Lockheed Martin Corporation. This is a big company, so it would be surprising to see insiders owning much of the company. Although their stake is less than 1%, we can see that the board members collectively own $51 million in shares (at current prices). It’s good to see board members owning stock, but it can be helpful to check whether those insiders have bought.

General public property

The general public, including retail investors, owns a 26% stake in the company and cannot be easily ignored. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Next steps:

Lockheed Martin doesn’t seem to be slowing down despite a failed multibillion-dollar acquisition and sanctions threats from China. On the contrary, it seems to be rooted even deeper in the American system of government. So even after the latest events, we are not surprised to find that our valuation tool finds the stock undervalued.

It is interesting to know who exactly owns a company. But to really get insight, we also need to consider other information. For example, we found 1 warning sign for Lockheed Martin which you should be aware of before investing here.

If you’re wondering if this company will grow or shrink, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position at any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials.