Why Lockheed Martin May Be an Underrated Stock to Buy Right Now

For investors seeking out a relatively safe stock to own this year, one investment that can withstand a lot of market volatility is Lockheed Martin (NYSE:LMT). It has risen by around 15% this year, and yet it still offers good value. Plus, it offers a terrific dividend and was a solid stock to own during the last big market crash.

Here's a closer look at the business and why it may prove to be an underrated investment right now.

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Back in 2022, when the market crashed, Lockheed Martin soared

When interest rates were on the rise and many growth stocks were struggling in 2022, Lockheed Martin's stock did far better than the S&P 500. That year, the broad index's total return, which included dividends, was negative 18%. Lockheed Martin's stock, by comparison, was up over 40% when including its payout.

It was a terrific performance for the business, which has a close relationship with the U.S. government and benefits from strong spending on defense, so much so that last year, there were even reports of the U.S. government considering taking a stake in the business.

While it may not generate strong returns if there's another downturn in the markets, the nature of its operations makes it a fairly resilient defense stock to own. In its most recent quarterly results, which ended June 28, revenue totaled $20.1 billion, up 11% year over year.

The stock remains an attractive low-value, high-dividend investment

Lockheed Martin's stock has been rallying this year, but it may still have plenty of upside at its current price point. Based on analysts' earnings expectations for the year ahead, it's trading at a forward price-to-earnings multiple of just 16. By comparison, the average stock on the S&P 500 trades at a forward P/E of more than 19.

It's a cheap stock to own, and what makes it even more compelling as an investment is its dividend, which yields 2.6%, which is far higher than the 1% that the S&P 500 averages right now. The company has also increased its dividend for 24 consecutive years. Given its strong, resilient business, it's highly likely there will be more dividend increases to come in the future, giving investors plenty of reason to buy and hold the stock for the long haul.

Lockheed Martin may be one of the better all-around stocks to own right now, offering investors an excellent mix of value, safety, dividends, and growth potential.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lockheed Martin. The Motley Fool has a disclosure policy.