Lockheed Martin Corporation ( LMT - Analyst Report ) has received a five-year contract worth $13.5 million from the Office of Naval Research to explore highly advanced autonomous technologies aboard an unmanned vertical take-off and landing aircraft.

Per the contract, Lockheed Martin with a team consisting of industry, government, and academic partners will develop a technology that will allow an unmanned vertical take-off and landing aircraft to operate under supervisory control. The technology is developed in such a way that at the high level, the system will be controlled manually, while it will be operated automatically at the low level.

Further, the technology will offer supplemental decision aids on legacy manned platforms to the pilots and will have the potential to improve the utility and effectiveness of current unmanned vertical take-off and landing aircraft,

In the first one and half years of the five-year contract, the industry team led by Lockheed Martin will demonstrate the capabilities of its Open-Architecture Planning and Trajectory Intelligence for Managing Unmanned Systems (OPTIMUS) architecture.

Apart from this contract, Lockheed is busy with other sizeable contracts as well. Recently, in October, the company had received a contract from the U.S. Government worth $1.85 billion for the up gradation of 145 Block 20 F-16A/B aircraft for the Republic of China (“RoC”). Prior to that, the company had received a $111 million Modernized Target Acquisition Designation Sight/Pilot Night Vision Sensor (M-TADS/PNVS) Performance Based Logistics (“PBL”) contract from the U.S. Army.

Based in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company, engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. Key growth drivers of the company are its focus on debt repayment, its ongoing share repurchase program and the incremental dividend.

A few days back, Lockheed Martin had made an announcement to increase the quarterly dividend rate to $1.15 per share, up approximately by 15 cents from the current payout of approximately $1.00 per share. The proposed hike would bring the annual dividend to $4.60, up 15% from the previous payout. The increased quarterly dividend will be paid on December 28, 2012 to shareholders of record at the close of business on December 3, 2012.

Going forward, we believe Lockheed Martin has significant upside potential based on the Obama administration’s focus on Intelligence Surveillance Reconnaissance (ISR), unmanned systems, force protection, cybersecurity, and missile defense. The company presently retains a short-term Zacks #3 Rank (Hold). We have a long-term Outperform recommendation on the stock.

Some of Lockheed Martin’s main competitors are The Boeing Company ( BA - Analyst Report ) and General Dynamics Corporation ( GD - Analyst Report ) .