Will Budget Cuts Rock These Defense Companies?

More than 1 million U.S. jobs could be slashed by cuts to the defense budget. If the 12-member congressional supercommittee cannot agree to its deficit-reduction target by Nov. 23 automatic cuts kick in.

Half of the automatic cuts, plus another $500 billion, would come from defense, for a total of about $1 trillion. Marion Blakey, Aerospace Industries Association’s president and chief executive, said the cuts would have devastating impacts on her industry and the broader economy. Aerospace Industries Association member companies include Boeing Co. (NYSE:BA), Lockheed Martin Corp. (NYSE:LMT) and Northrop Grumman Corp. (NYSE:NOC), according to a study done by George Mason University.

Don’t Miss: 5 Blue Chip Stocks Raising Dividends During Earnings.

“The supercommittee has been flooded with money-saving recommendations ranging from opening U.S. lands for oil and gas drilling to licensing online poker. Its next open meeting is Wednesday, at which members will hear from Congressional Budget Office director Douglas Elmendorf about discretionary spending,” according to MarketWatch.

  • Boeing Co. (NYSE:BA): The shares recently traded at $67.72, down $0.45, or 0.66%. Its market capitalization is $50.33 billion. They have traded in a 52-week range of $56.01 to $80.65. Volume today was 1,475 shares versus a 3-month average volume of 6,842,770 shares. The company’s trailing P/E is 13.40, while trailing earnings are $5.05 per share. The company pays a dividend of $1.68 per share for a dividend yield of 2.50%. About the company: The Boeing Company, together with its subsidiaries, develops, produces, and markets commercial jet aircraft, as well as provides related support services to the commercial airline industry worldwide. The Company also researches, develops, produces, modifies, and supports information, space, and defense systems, including military aircraft, helicopters and space and missile systems.
  • Lockheed Martin Corporation (NYSE:LMT): The shares recently traded at $75.35, down $0.08, or 0.11%. Its market capitalization is $24.21 billion. They have traded in a 52-week range of $66.36 to $82.43. Volume today was 500 shares versus a 3-month average volume of 2,950,870 shares. The company’s trailing P/E is 8.81, while trailing earnings are $8.55 per share. The company pays a dividend of $4.00 per share for a dividend yield of 5.30%. About the company: Lockheed Martin Corporation is a global security company that primarily researches, designs, develops, manufactures, and integrates advanced technology products and services. The Company’s businesses span space, telecommunications, electronics, information and services, aeronautics, energy, and systems integration. Lockheed Martin operates worldwide.
  • Northrop Grumman Corporation (NYSE:NOC): The shares recently traded at $57.31, down $0.61, or 1.05%. Its market capitalization is $14.97 billion. They have traded in a 52-week range of $49.20 to $72.50. Volume today was 0 shares versus a 3-month average volume of 3,202,510 shares. The company’s trailing P/E is 8.53, while trailing earnings are $6.72 per share. The company pays a dividend of $2.00 per share for a dividend yield of 3.50%. About the company: Northrop Grumman Corporation is a global security company. The Company provides systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide.

Investing Insights: Can These 4 Stocks Give Investors Firepower?