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The Boeing Company (BA) - free report >>
Lockheed Martin Corporation (LMT) - free report >>
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Reasons to Add Leidos Holdings (LDOS) to Your Portfolio Now
Leidos Holdings’ (LDOS - Free Report) commendable budgetary revisions, strong cash flow growth and solid contract inflows will likely boost its performance in the long term.
Contract Inflows
Ongoing contract wins for the company’s cost-effective defense solutions from the Pentagon as well as other U.S. allies are primary growth drivers. In fact, these contracts tend to strengthen Leidos Holdings’ backlog.
At the end of second-quarter 2019, Leidos Holdings’ total backlog stood at $21.7 billion compared with $21.5 billion at the end of the first quarter. Such solid backlog trends indicate outstanding revenue growth prospects for the company in the upcoming quarters.
Improvement in Defense Budget
The company envisions more growth prospects, considering the current U.S. administration’s inclination to increase defense spending. In this regard, it is crucial to mention that the fiscal 2020 defense budget shows 5% rise in spending levels from fiscal 2019’s budget.
Steady Cash Flow & Dividend Hike
Leidos Holdings’ well-defined balance sheet and steady cash flow position provide it significant financial flexibility. This enables the company to reward shareholders with outstanding dividend payouts and share repurchases.
Solid cash flow reserve seems to have propelled Leidos Holdings to make it’s first-ever dividend hike. The board of directors announced a dividend hike of 6%. Such cash deployment strategies bode well for the company’s growth.
Leidos Holdings’ current dividend yield is better than the industry’s average.
Other companies from the aerospace & defense space that hold favorable dividend yield ratio are Lockheed Martin Corporation (LMT - Free Report) , The Boeing Company (BA - Free Report) and Bae Systems (BAESY - Free Report) .
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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