In today’s content analysis, we take a look at Lockheed Martin’s (LMT) Q1 results that were updated in StockPointer last Wednesday. Lockheed Martin has been part of our US-Large model portfolio since March 2nd 2015 and has returned about 20%, including dividends, since that date. 
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Lockheed’s intrinsic value jumped from $190 to $280 this quarter thanks to an increasing NOPAT and a high capital growth rate of 34% over the last 12 months. The P/IV ratio indicates a 19% potential upside, one of the highest observed since 2012. The return on capital did decrease a little bit from 16.4% to 14.4%, but this is mainly due to the invested capital growing at a slightly faster pace than the NOPAT, which is typical when a company increases its invested capital by such a large margin in a short period of time.
Considering the fact that the current operating value (COV) increased by 22% in 12 months, the current future growth value (FGV) premium of 16.7% seems reasonable.
As for LMT’s economic performance, the total EVA generated is now at an all-time high and the growth rate has been very stable since late 2013. The NOPAT has been increasing every single year over the last 5 years, which is definitely what we’re looking for.
The accounting performance of Lockheed is also enviable. Since 2012, the dividends increased at an average rate of 16% per year, and the company also bought back shares every year. The free cash-flows are also at a 5-year high, indicating the company could be in a good position to continue to increase its dividends, buyback shares, pay back debt faster, or increase the invested capital growth rate.
