Basic information for shareholders of the defense giant.

1. Lockheed Martin
An Owner's Manual for Investors

2. you're entitled to a share of its earnings.
As an owner of Lockheed Martin's stock

3. NOT TO SCALE
obviously
$3.6
Billion
Lockheed's
12-Month
Earnings
Lockheed's
Earnings
Per Share
$11.27

4. If you divide Lockheed's share price
by its earnings per share (EPS), you
get its price-to-earnings ratio.

5. P/E
Ratio
=
Share Price
EPS
19.37=
$218.28
$11.27
=
This is how much it costs to buy $1
of Lockheed's annual earnings.

6. A higher P/E ratio implies a lower
potential return.

7. 1
10
100
1,000
100 Biggest S&P Companies
P/ERatio
Most companies have P/E ratios
between 12 and 30.
What Is a Typical Stock's P/E Ratio?

8. You can also use Lockheed Martin's
P/E ratio to derive its earnings yield.

9. 1
19.37 5.2%
Lockheed's
Earnings
Yield
1
P/E Ratio
= ==

10. This helps you compare a stock
to other types of investments,
such as bonds and real estate.

11. 5.16%
6.63%
4.33%
2.90%
2.45%2.21%
Lockheed's
Earnings
Yield
Class A
Office
Building
Cap Rate
S&P 500
Earnings
Yield
10-Year
AAA Corp.
Bonds
5-Year
CDs
10-Year
Treasuries
Average Rates of Return

12. Of course, if you own one share of
Lockheed Martin stock, you don't
get a check each year for its EPS.

13. You receive quarterly dividends
instead, which typically account
for only a portion of total earnings.

14. 53%
Lockheed's Payout Ratio
The payout ratio is the percentage of earnings
paid as dividends. Anywhere from 30% to
70% is normal.

15. 3.02%Lockheed Martin's Dividend Yield

16. Lockheed's
Dividend
Yield
=
Dividend
per Share
Share
Price
=
$6.60
$218.28
= 3.02%

17. You can then use this to compare
stocks based on their income-
generating potential.

18. 3.02%
3.87%
3.32%
3.12%
1.72%
0.74%
Lockheed IBM Wal-Mart Coca-Cola Comcast Visa
Representative Dividend Yields

19. Lockheed also buys back its own stock.

20. This reduces its share count, which
increases the ownership interest
of each remaining share.

21. $2.6
Billion
-2.5%
Lockheed's
Buybacks
(TTM)
Change in
Lockheed's
Share Count
(TTM)

22. Lockheed Martin's stock?
So, what does the future hold for

23. Lockheed
368%
S&P 500
96%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
Today2013201120092007
If the Past Is Prologue...
Total return since Jan. 1, 2006

24. Lockheed Martin's earnings to grow.
While it's impossible to predict the
future with precision, analysts expect

25. $11.35
$12.12
Current Fiscal Year Next Fiscal Year
Average Earnings per Share Estimate Among Wall
Street Analysts
Divining Lockheed Martin's Future

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