Boeing vs. Lockheed Martin: Which Aerospace Stock Is a Better Buy in 2026?

The aerospace market is at a crossroads between commercial recovery and defense modernization. Investors must decide if The Boeing Co. (NYSE:BA) or Lockheed Martin Corp. (NYSE:LMT) offers the better path for long-term growth today.

Boeing dominates commercial aviation and defense, while Lockheed Martin is a premier pure-play defense contractor. Comparing them reveals a choice between a high-stakes turnaround and a steady, dividend-paying stalwart. Both are essential to global infrastructure but offer very different risk and reward profiles for your portfolio.

The case for Boeing Co.

Boeing serves a global market, providing commercial airplanes and defense systems as one of the largest industrial stocks in the world. The company relies heavily on the U.S. government, specifically the Department of Defense and NASA, while also maintaining critical relationships with commercial airlines in China. Customer concentration like this adds a layer of risk to the business, especially given its recent acquisition of Spirit AeroSystems, which forced Boeing to support competitors like Airbus (OTC:EADSF).

In FY 2025, revenue reached about $89.5 billion, representing a significant 34.5% increase over the previous year. This growth helped the company achieve a net income of approximately $2.2 billion, a sharp recovery from the net loss of around $11.8 billion reported in FY 2024. The turnaround highlights a significant improvement in delivery volumes across its commercial segments.

As of its December 2025 balance sheet, the debt-to-equity ratio is roughly 10.0x, comparing total debt to shareholder equity. The current ratio, which measures the ability to cover short-term debts with short-term assets, is close to 1.2x. Free cash flow was roughly negative $1.9 billion; note that stock-based compensation (SBC) represented roughly 40% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.

The case for Lockheed Martin

Lockheed Martin is a premier name among defense stocks, focusing on high-tech security and aerospace solutions. The U.S. government accounted for roughly 72% of its 2025 sales, and customer concentration like this adds a layer of risk to the business. The F-35 program alone represented approximately 27% of total revenue, involving commitments from seven international partner countries and twelve foreign military sales customers.

In FY 2025, revenue reached about $75.1 billion, reflecting a steady 5.7% growth compared to the prior year. Net income for the period was nearly $5.0 billion, which remains robustly profitable despite being a slight decline from previous years. The company continues to benefit from its dominant position in stealth fighter technology and missile defense systems.

As of its December 2025 balance sheet, the debt-to-equity ratio is approximately 3.2x, indicating the level of debt relative to the value of shareholder equity. Its current ratio is nearly 1.1x, which measures a company's ability to pay off short-term obligations. Free cash flow was roughly $6.9 billion, a metric representing cash from operations minus capital expenditures.

Risk profile comparison

Boeing continues to face hurdles regarding production and certification schedules for several aircraft models, including the 777X and 737 variants. These delays are often exacerbated by complex supply chain dependencies and strict regulatory oversight. The company also navigates risks from losses on fixed-price defense contracts and the integration of Spirit AeroSystems, which brought unexpected liabilities.

Lockheed Martin faces its own set of challenges, particularly its high revenue concentration within the F-35 program. Any future budget cuts or technical performance issues with this platform could significantly impact its financial health. The company also manages risks from a $4.25 billion lawsuit regarding proprietary business models while competing with rivals like RTX Corp. (NYSE:RTX) and Northrop Grumman Corp. (NYSE:NOC).

Valuation comparison

Lockheed Martin appears cheaper than Boeing because its Forward P/E against future earnings estimates and P/S ratio against sales over the past twelve months are lower.

Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Boeing is still working to recover from safety and supply chain issues that have recently dogged the business. While revenue will rise about 9% to $97.7 billion this year, the company's net income will fall dramatically to around $85 million, according to consensus Wall Street analyst forecasts, hence its high forward P/E ratio.

But don't count Boeing out. It is among the largest aerospace and defense companies, giving it excellent long-term prospects due to its leading position in the growing commercial aerospace industry. In the first quarter of its current fiscal year, the order backlog rose in the double digits, setting a new record. Backlogs mean future sales are strong and show the industry believes in the business. Boeing can expect long-term growth from the air superiority fighter, the F-47, which it is developing to replace the F-22.

Like Boeing, Lockheed Martin Corp. is a core company in U.S. aerospace and defense. In particular, the F-35 fighter program remains a pillar of Lockheed's business, with the Defense Department planning to continue to buy the jet into the 2040s. Having more than a quarter of revenue essentially guaranteed for 15 years or more is unheard of and quite appealing to a long-term investor.In addition to jet fighters, the company has a handful of drone systems it says can integrate into U.S. defense systems to provide a blanket of security systems to complement the jets.

Lockheed's revenue should rise 8% this year to $81 billion, with a much healthier 40% jump in net income to more than $7 billion.

Either one of these businesses is likely a good long-term buy. But under the adage of buying good companies at good prices, Lockheed's lower forward P/E and P/S ratios make it the better buy in 2026.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing, Lockheed Martin, Northrop Grumman, and RTX. The Motley Fool has a disclosure policy.