These Loser Stocks Deserve a Lot More Love
Lockheed Martin and other defense companies have solid earnings, decent cash flow, bright outlooks and attractive valuations. What more do you want?
Defense stocks including Lockheed Martin have undershot shares of other companies that are more vulnerable to the pandemic.
Photographer: Andrew Harrer/Bloomberg
Add the lackluster performance of defense stocks to the long list of puzzling inequities in the pandemic stock market.
A custom basket of top U.S. defense contractors within the S&P 500 Index is down about 20% for the year, even as the broader benchmark pushed into the green this week. Even excluding Boeing Co., whose commercial aerospace travails are more of a focus for investors, the group is still down about 16%. That’s significantly worse than the performance for S&P 500 railroads, restaurants, foot-wear makers and soft-drink companies, all of which are more immediately exposed to the volatility of economic reopenings and behavioral shifts than makers of missiles, fighter jets and radar systems that rely on government contracts sealed years earlier.