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LMT vs. GD: Which Defense Stock Looks More Attractive Right Now?
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Key Takeaways
Lockheed Martin secures major contracts, lifting backlog to $193.6B and supporting revenue visibility.
General Dynamics reports $118.05B backlog, driven by strong demand across defense and cybersecurity deals.
Lockheed Martin's F-35 program generated about 27% of total 2025 sales, boosting growth momentum.
Geopolitical instability, whether in the form of regional conflicts, great-power rivalry, or rising security tensions, tends to drive governments to prioritize defense readiness. Companies like Lockheed Martin (LMT - Free Report) and General Dynamics (GD - Free Report) are particularly well positioned to benefit from such trends because they are deeply embedded in long-term government defense programs.
Lockheed Martin is heavily involved in advanced aerospace systems, including fighter jets like the F-35, missile defense systems, and space technologies. General Dynamics, on the other hand, has a strong presence in land and naval systems. It manufactures armored combat vehicles, submarines and IT systems for defense agencies.
These companies typically secure multi-year (sometimes multi-decade) agreements with governments, especially the U.S. Department of Defense. This provides stable, predictable revenue streams even during economic downturns, making them less sensitive to typical market cycles.
Let's compare the two stocks' fundamentals to determine which one is better positioned at present.
Factors Acting in Favor of LMT Stock
Keeping up with its trend of securing major contracts from the Pentagon and other U.S. allies, Lockheed Martin recorded several notable wins in the fourth quarter of 2025. These included a contract to deliver 18 space vehicles for its Tranche 3 Tracking Layer (TRKT3) constellation, with a potential value exceeding $1 billion. The company also secured a $233 million deal to supply IRST21 Block II systems and initial spares to the U.S. Navy and Air National Guard (“ANG”). These strong order flows contributed to a robust backlog, which totaled $193.6 billion as of Dec. 31, 2025.
Lockheed Martin is one of the largest U.S. defense contractors with a platform-centric focus that guarantees a steady inflow of follow-on orders from its leveraged presence in the Army, Air Force, Navy and IT programs. The F-35 program continues to be a key growth program for the company’s Aeronautics business segment. This program generated approximately 27% of LMT’s consolidated net sales in 2025.
Factors Acting in Favor of GD Stock
Significant awards won by General Dynamics in the last reported quarter included a $285 million contract to deliver cybersecurity services aimed at strengthening the Commonwealth of Virginia’s cybersecurity infrastructure. Such impressive order trends and strong backlog count indicate solid demand for the company’s products, thereby supporting its revenue growth prospects.
At the end of the fourth quarter of 2025, General Dynamics witnessed a solid backlog of $118.05 billion, driven by a strong order inflow. The estimated contract value, which combines the total backlog with the potential contract value, totaled $178.94 billion at the end of the fourth quarter of 2025. The strong order flow was driven by robust demand across the company’s product and services portfolio.
How Do Zacks Estimates Compare for LMT & GD?
The Zacks Consensus Estimate for Lockheed Martin’s 2026 earnings per share (EPS) indicates an increase of 0.47% over the past 60 days. LMT’s long-term (three to five years) earnings growth rate is 18.67%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for General Dynamics’ 2026 EPS indicates a decrease of 1.26% over the past 60 days. GD’s long-term earnings growth rate is 9.2%.
Image Source: Zacks Investment Research
Valuation for LMT & GD
Lockheed Martin shares trade at a forward 12-month Price/Sales (P/S F12M) of 1.71X compared with General Dynamics’ 1.63X.
LMT & GD’s Return on Equity (ROE)
ROE measures how efficiently a company is utilizing its shareholders’ funds to generate profits. Lockheed Martin’s current ROE is 108.53% compared with General Dynamics’ 17.57%.
LMT & GD’s Price Performance
In the past six months, shares of Lockheed Martin have increased 18.7%, while those of General Dynamics have declined 2.6%.
LMT or GD: Which Is a Better Choice Now?
Lockheed Martin continues to secure multiple major defense contracts from the Pentagon and allied nations, reinforcing a strong backlog and steady future revenue visibility. LMT’s diversified, platform-driven portfolio continues to drive consistent growth across military segments. General Dynamics secures key contracts, including cybersecurity services, reflecting strong demand across its diverse defense and technology offerings. Robust order inflows have strengthened its backlog and overall contract pipeline, supporting solid future revenue prospects.
Our choice at the moment is Lockheed Martin, given its better price performance, strong earnings growth and better ROE than General Dynamics. LMT carries a Zacks Rank #2 (Buy) and GD has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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LMT vs. GD: Which Defense Stock Looks More Attractive Right Now?
Key Takeaways
Geopolitical instability, whether in the form of regional conflicts, great-power rivalry, or rising security tensions, tends to drive governments to prioritize defense readiness. Companies like Lockheed Martin (LMT - Free Report) and General Dynamics (GD - Free Report) are particularly well positioned to benefit from such trends because they are deeply embedded in long-term government defense programs.
Lockheed Martin is heavily involved in advanced aerospace systems, including fighter jets like the F-35, missile defense systems, and space technologies. General Dynamics, on the other hand, has a strong presence in land and naval systems. It manufactures armored combat vehicles, submarines and IT systems for defense agencies.
These companies typically secure multi-year (sometimes multi-decade) agreements with governments, especially the U.S. Department of Defense. This provides stable, predictable revenue streams even during economic downturns, making them less sensitive to typical market cycles.
Let's compare the two stocks' fundamentals to determine which one is better positioned at present.
Factors Acting in Favor of LMT Stock
Keeping up with its trend of securing major contracts from the Pentagon and other U.S. allies, Lockheed Martin recorded several notable wins in the fourth quarter of 2025. These included a contract to deliver 18 space vehicles for its Tranche 3 Tracking Layer (TRKT3) constellation, with a potential value exceeding $1 billion. The company also secured a $233 million deal to supply IRST21 Block II systems and initial spares to the U.S. Navy and Air National Guard (“ANG”). These strong order flows contributed to a robust backlog, which totaled $193.6 billion as of Dec. 31, 2025.
Lockheed Martin is one of the largest U.S. defense contractors with a platform-centric focus that guarantees a steady inflow of follow-on orders from its leveraged presence in the Army, Air Force, Navy and IT programs. The F-35 program continues to be a key growth program for the company’s Aeronautics business segment. This program generated approximately 27% of LMT’s consolidated net sales in 2025.
Factors Acting in Favor of GD Stock
Significant awards won by General Dynamics in the last reported quarter included a $285 million contract to deliver cybersecurity services aimed at strengthening the Commonwealth of Virginia’s cybersecurity infrastructure. Such impressive order trends and strong backlog count indicate solid demand for the company’s products, thereby supporting its revenue growth prospects.
At the end of the fourth quarter of 2025, General Dynamics witnessed a solid backlog of $118.05 billion, driven by a strong order inflow. The estimated contract value, which combines the total backlog with the potential contract value, totaled $178.94 billion at the end of the fourth quarter of 2025. The strong order flow was driven by robust demand across the company’s product and services portfolio.
How Do Zacks Estimates Compare for LMT & GD?
The Zacks Consensus Estimate for Lockheed Martin’s 2026 earnings per share (EPS) indicates an increase of 0.47% over the past 60 days. LMT’s long-term (three to five years) earnings growth rate is 18.67%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for General Dynamics’ 2026 EPS indicates a decrease of 1.26% over the past 60 days. GD’s long-term earnings growth rate is 9.2%.
Image Source: Zacks Investment Research
Valuation for LMT & GD
Lockheed Martin shares trade at a forward 12-month Price/Sales (P/S F12M) of 1.71X compared with General Dynamics’ 1.63X.
LMT & GD’s Return on Equity (ROE)
ROE measures how efficiently a company is utilizing its shareholders’ funds to generate profits. Lockheed Martin’s current ROE is 108.53% compared with General Dynamics’ 17.57%.
LMT & GD’s Price Performance
In the past six months, shares of Lockheed Martin have increased 18.7%, while those of General Dynamics have declined 2.6%.
LMT or GD: Which Is a Better Choice Now?
Lockheed Martin continues to secure multiple major defense contracts from the Pentagon and allied nations, reinforcing a strong backlog and steady future revenue visibility. LMT’s diversified, platform-driven portfolio continues to drive consistent growth across military segments. General Dynamics secures key contracts, including cybersecurity services, reflecting strong demand across its diverse defense and technology offerings. Robust order inflows have strengthened its backlog and overall contract pipeline, supporting solid future revenue prospects.
Our choice at the moment is Lockheed Martin, given its better price performance, strong earnings growth and better ROE than General Dynamics. LMT carries a Zacks Rank #2 (Buy) and GD has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.