Home > Comparison > Industrials > LMT vs BWXT
The strategic rivalry between Lockheed Martin Corporation and BWX Technologies, Inc. defines the current trajectory of the Aerospace & Defense industry. Lockheed Martin operates as a diversified industrial giant with broad defense systems and space technologies. BWX Technologies focuses on specialized nuclear components and services, aiming at niche defense and energy markets. This analysis will assess which company provides a superior risk-adjusted investment profile amidst evolving sector dynamics.
Table of contents
Companies Overview
Lockheed Martin and BWX Technologies stand as pivotal players in the aerospace and defense sector, shaping critical technologies.
Lockheed Martin Corporation: Aerospace & Defense Powerhouse
Lockheed Martin dominates as a global aerospace and defense leader. Its core revenue stems from advanced technology systems, spanning Aeronautics, Missiles, Rotary and Mission Systems, and Space. In 2026, it focuses strategically on integrating space and ground-based systems to enhance national security, reinforcing its competitive edge with a broad portfolio and deep government partnerships.
BWX Technologies, Inc.: Nuclear Components Specialist
BWX Technologies specializes in manufacturing nuclear components and services. Its primary revenue arises from supplying reactors, nuclear fuel, and related systems to government and commercial clients. The company’s 2026 emphasis lies on expanding nuclear power generation equipment and nuclear materials processing, underscoring its niche expertise in nuclear propulsion and power solutions.
Strategic Collision: Similarities & Divergences
Both companies operate within aerospace & defense but diverge sharply; Lockheed Martin pursues a diversified, integrated technology approach, while BWX focuses on the specialized nuclear segment. They compete primarily in government contracts but in different defense technology arenas. Lockheed offers broad exposure to defense aerospace innovation; BWX presents a concentrated play on nuclear technology, reflecting distinct risk and growth profiles.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Lockheed Martin Corporation (LMT) | BWX Technologies, Inc. (BWXT) |
|---|---|---|
| Revenue | 75B | 2.7B |
| Cost of Revenue | 67.4B | 2.0B |
| Operating Expenses | -103M | 275M |
| Gross Profit | 7.6B | 655M |
| EBITDA | 7.8B | 474M |
| EBIT | 7.0B | 388M |
| Interest Expense | 1.1B | 39M |
| Net Income | 5.0B | 282M |
| EPS | 21.56 | 3.08 |
| Fiscal Year | 2025 | 2024 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison uncovers which company runs a more efficient and profitable corporate engine through recent financial performance.
Lockheed Martin Corporation Analysis
Lockheed Martin’s revenue rose steadily from 67.0B in 2021 to 75.1B in 2025, but net income declined from 6.3B to 5.0B. Gross margin settled near 10%, while net margin remains favorable at 6.7%. Despite solid revenue growth, net income and EPS fell, signaling margin pressure and weakening profitability momentum in 2025.
BWX Technologies, Inc. Analysis
BWXT expanded revenue from 2.1B in 2020 to 2.7B in 2024, with net income growing modestly from 279M to 282M. Its gross margin stands strong at 24.2%, and net margin improved to 10.4%. BWXT’s consistent EBIT and EPS growth highlight operational efficiency and rising profitability, suggesting a healthier margin profile than Lockheed Martin.
Margin Strength vs. Revenue Scale
BWXT clearly leads on margin efficiency and profit growth, boasting a robust 24% gross margin and expanding EPS. Lockheed Martin delivers larger absolute revenues but suffers declining net income and margins. For investors prioritizing profitability and margin resilience, BWXT presents a more attractive financial profile despite its smaller scale.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of these companies:
| Ratios | Lockheed Martin Corporation (LMT) | BWX Technologies, Inc. (BWXT) |
|---|---|---|
| ROE | 74.6% | 26.1% |
| ROIC | 17.4% | 12.8% |
| P/E | 22.3x | 36.2x |
| P/B | 16.6x | 9.4x |
| Current Ratio | 1.09 | 1.96 |
| Quick Ratio | 0.94 | 1.88 |
| D/E (Debt-to-Equity) | 0.17 | 0.98 |
| Debt-to-Assets | 2.0% | 36.8% |
| Interest Coverage | 6.92x | 9.64x |
| Asset Turnover | 1.25 | 0.94 |
| Fixed Asset Turnover | 8.46 | 2.12 |
| Payout ratio | 62.4% | 31.3% |
| Dividend yield | 2.80% | 0.87% |
| Fiscal Year | 2025 | 2024 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, exposing hidden risks and operational strengths that shape investment decisions.
Lockheed Martin Corporation
Lockheed Martin delivers a robust 74.65% ROE and 6.68% net margin, signaling strong profitability. Its P/E of 22.26 appears fairly valued, though a high P/B of 16.62 raises caution. The company rewards shareholders with a 2.8% dividend yield, reflecting disciplined capital allocation and steady cash returns.
BWX Technologies, Inc.
BWXT posts a solid 26.09% ROE and a 10.43% net margin, highlighting efficient operations but at a stretched valuation with a P/E of 36.18. Its current ratio near 2.0 shows good liquidity, yet a low 0.87% dividend yield suggests reinvestment into growth or R&D rather than shareholder payouts.
Balanced Profitability vs. Growth Premium
Lockheed Martin offers a superior blend of high profitability and reasonable valuation, supporting stable shareholder returns. BWXT’s premium multiple and lower dividend yield reflect growth expectations but elevate risk. Investors seeking operational strength and income may favor Lockheed; those targeting growth potential might consider BWXT.
Which one offers the Superior Shareholder Reward?
I observe Lockheed Martin (LMT) delivers a 2.8% dividend yield with a payout ratio near 62%, backed by strong free cash flow coverage (80%). Its buyback program is robust, enhancing total returns sustainably. BWX Technologies (BWXT) yields only 0.87% with a lower payout ratio (~31%) and smaller free cash flow coverage (~62%). BWXT relies more on reinvestment and moderate buybacks. Historically, LMT’s balanced dividend and aggressive buybacks offer a more reliable total return profile. I conclude Lockheed Martin presents the superior shareholder reward in 2026.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Lockheed Martin Corporation and BWX Technologies, Inc.:
Lockheed Martin shows a balanced profile with strong DCF (4) and ROE (5) scores, moderate debt management (3), but weaker valuation scores. BWX matches Lockheed’s ROE (5) and ROA (4) but suffers from poor debt (1) and valuation (1) scores, relying heavily on operational efficiency rather than financial stability. Lockheed Martin offers a more well-rounded investment case.
Bankruptcy Risk: Solvency Showdown
The Altman Z-Score gap favors BWX Technologies, implying a safer long-term survival outlook in this cycle:
BWX scores 6.73, well inside the safe zone, indicating strong financial stability. Lockheed Martin’s 3.69 also places it in the safe zone but with less cushion, signaling moderate risk compared to BWX.
Financial Health: Quality of Operations
Piotroski F-Scores reveal Lockheed Martin’s slightly stronger operational quality, although both firms remain average:
Lockheed Martin scores 6, indicating decent internal financial strength. BWX scores 5, close but showing marginally weaker fundamentals. Neither firm raises red flags, but Lockheed edges ahead in operational robustness.
How are the two companies positioned?
This section dissects Lockheed Martin and BWXT’s operational DNA by comparing revenue distribution and internal dynamics. The goal is to confront their economic moats and identify the most resilient competitive advantage today.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Lockheed Martin Corporation and BWX Technologies diversify their income streams and where their primary sector bets lie:
Lockheed Martin anchors its revenue in four robust segments, led by Aeronautics at $30.3B, showcasing a balanced portfolio with no single segment dominating excessively. BWX Technologies pivots heavily on its Government Operations Segment at $2.18B, dwarfing its Commercial Operations Segment at $524M. Lockheed’s diversity reduces concentration risk, while BWX’s reliance on government contracts signals strong infrastructure ties but higher exposure to policy shifts.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of Lockheed Martin Corporation and BWX Technologies, Inc.:
Lockheed Martin Corporation Strengths
- Diversified revenue across Aeronautics, Missiles, Rotary Systems, and Space
- High ROE at 74.65% and ROIC at 17.39%
- Low debt-to-assets at 1.95% signals financial stability
- Strong global presence with $53.7B US and diversified international sales
BWX Technologies, Inc. Strengths
- Favorable net margin at 10.43% and solid ROE at 26.09%
- Strong current and quick ratios above 1.8 indicate liquidity
- Government operations dominate revenue, showing focused market share
- Interest coverage ratio of 9.83 reflects good debt servicing capacity
Lockheed Martin Corporation Weaknesses
- Price-to-book ratio at 16.62 is unfavorable, suggesting potential overvaluation
- Neutral net margin at 6.68% lags BWXT
- Quick ratio below 1 indicates potential short-term liquidity concerns
- PE ratio neutral at 22.26, limiting valuation upside
BWX Technologies, Inc. Weaknesses
- High PE at 36.18 and unfavorable PB of 9.44 indicate valuation risk
- Dividend yield at 0.87% is low compared to peers
- Moderate debt-to-equity near 1.0 increases financial risk
- Asset turnover ratios show neutral efficiency, lower than LMT
Lockheed Martin stands out with diversified segments and strong capital efficiency, but valuation metrics raise caution. BWXT shows higher profitability and liquidity, yet faces valuation and dividend yield challenges. Both companies reflect distinct strategic focuses shaped by their market presence and financial profiles.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable shield protecting long-term profits from relentless competitive erosion. Let’s dissect how these companies defend their turf:
Lockheed Martin Corporation: Dominant Defense Contractor with Intangible Assets
Lockheed Martin’s moat stems from deep government ties and classified technology, reflected in a strong ROIC exceeding WACC by 12.5%. Despite a recent ROIC decline, new space and missile programs could reinforce its lead in 2026.
BWX Technologies, Inc.: Precision Nuclear Components with Cost Advantage
BWXT’s competitive edge lies in its specialized nuclear component manufacturing, securing steady contracts. Its ROIC surpasses WACC by 5.2%, albeit declining. Expansion into commercial nuclear markets offers growth potential distinct from Lockheed’s defense focus.
Verdict: Classified Intangibles vs. Specialized Nuclear Precision
Both companies sustain slightly favorable moats with declining profitability trends. Lockheed Martin’s intangible assets and government relationships form a deeper moat than BWXT’s niche cost advantage. Lockheed is better positioned to defend market share amid evolving defense demands.
Which stock offers better returns?
Over the past 12 months, both Lockheed Martin Corporation and BWX Technologies, Inc. exhibited strong price gains with accelerating trends, reflecting robust market momentum and significant trading activity shifts.
Trend Comparison
Lockheed Martin’s stock gained 46.5% over the past year, showing a bullish trend with accelerating price momentum from 2025-11-16 to 2026-02-01. Volatility remains high with a 47.89 standard deviation.
BWX Technologies surged 99.08% over the same period, also bullish with acceleration but lower volatility at 36.35 standard deviation. Recent gains slowed, rising 15.21% with decelerating slope.
BWXT outperformed LMT on price appreciation over 12 months, nearly doubling returns. However, LMT’s recent acceleration contrasts BWXT’s deceleration in the latest quarter.
Target Prices
Analysts show a moderate upside potential in the aerospace and defense sector with clear consensus targets.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Lockheed Martin Corporation | 519 | 695 | 598.7 |
| BWX Technologies, Inc. | 180 | 225 | 204 |
Lockheed Martin’s consensus target sits below its current price of 634, signaling limited upside or a cautious stance. BWX Technologies’ target aligns closely with its current price near 205, indicating balanced market expectations.
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How do institutions grade them?
The following tables summarize recent institutional grades for Lockheed Martin Corporation and BWX Technologies, Inc.:
Lockheed Martin Corporation Grades
This table displays the latest grades and actions from reputable grading companies for Lockheed Martin:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | maintain | Sector Perform | 2026-01-30 |
| TD Cowen | maintain | Hold | 2026-01-30 |
| UBS | maintain | Neutral | 2026-01-15 |
| Citigroup | maintain | Neutral | 2026-01-13 |
| Jefferies | maintain | Hold | 2026-01-12 |
| Truist Securities | upgrade | Buy | 2026-01-09 |
| JP Morgan | downgrade | Neutral | 2025-12-19 |
| Morgan Stanley | downgrade | Equal Weight | 2025-12-16 |
| UBS | maintain | Neutral | 2025-10-22 |
| Bernstein | maintain | Market Perform | 2025-10-20 |
BWX Technologies, Inc. Grades
Below is a summary of recent institutional grades and changes for BWX Technologies:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Seaport Global | downgrade | Neutral | 2026-01-20 |
| B of A Securities | maintain | Buy | 2025-11-13 |
| BTIG | maintain | Buy | 2025-11-07 |
| Truist Securities | maintain | Hold | 2025-11-04 |
| Truist Securities | maintain | Hold | 2025-10-15 |
| Deutsche Bank | maintain | Hold | 2025-10-08 |
| B of A Securities | maintain | Buy | 2025-08-13 |
| Deutsche Bank | maintain | Hold | 2025-08-06 |
| Maxim Group | downgrade | Hold | 2025-08-06 |
| Truist Securities | maintain | Hold | 2025-08-05 |
Which company has the best grades?
Lockheed Martin’s grades mostly range from neutral to hold, with a recent upgrade to buy by Truist Securities. BWX Technologies shows a mix of buy and hold ratings but includes recent downgrades to neutral and hold. Lockheed Martin’s slightly stronger buy signals could influence investor confidence more positively.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
Lockheed Martin Corporation
- Dominates aerospace & defense with diversified segments and strong U.S. government ties.
BWX Technologies, Inc.
- Focused on nuclear components with niche markets but faces intense competition in specialized sectors.
2. Capital Structure & Debt
Lockheed Martin Corporation
- Low debt-to-equity (0.17) and strong interest coverage (6.3) indicate financial stability.
BWX Technologies, Inc.
- Higher debt-to-equity (~0.98) and moderate leverage raise concerns over financial risk management.
3. Stock Volatility
Lockheed Martin Corporation
- Very low beta (0.245) shows low volatility and defensive stock behavior.
BWX Technologies, Inc.
- Higher beta (0.852) implies greater sensitivity to market swings and higher volatility risk.
4. Regulatory & Legal
Lockheed Martin Corporation
- Subject to stringent defense contracts and export controls, but long-term government relationships mitigate risk.
BWX Technologies, Inc.
- Nuclear regulatory scrutiny is intense, and compliance costs remain high amid evolving safety standards.
5. Supply Chain & Operations
Lockheed Martin Corporation
- Complex global supply chain with risks from geopolitical tensions but benefits from scale.
BWX Technologies, Inc.
- Narrower supply chain focused on nuclear materials, vulnerable to raw material availability and regulatory delays.
6. ESG & Climate Transition
Lockheed Martin Corporation
- Faces pressure to reduce carbon footprint and improve sustainability in aerospace manufacturing.
BWX Technologies, Inc.
- Nuclear focus both a risk and opportunity in climate transition; waste management and safety are key concerns.
7. Geopolitical Exposure
Lockheed Martin Corporation
- Heavy reliance on U.S. government and foreign military sales exposes it to geopolitical shifts and defense budgets.
BWX Technologies, Inc.
- U.S.-centric nuclear contracts reduce global geopolitical exposure but link to U.S. policy changes.
Which company shows a better risk-adjusted profile?
Lockheed Martin’s dominant market position, low leverage, and low volatility underpin a stronger risk-adjusted profile. BWX faces higher financial risk due to elevated debt and regulatory pressures. BWX’s niche market and nuclear focus create specialized risks that may amplify volatility. Lockheed Martin’s Altman Z-score (3.69) confirms its financial safety compared to BWX’s higher but less diversified profile. The most impactful risk for Lockheed Martin is geopolitical exposure affecting defense budgets. For BWX, regulatory and capital structure risks dominate. Recent data show BWX’s debt-to-equity near 1.0, a red flag for financial resilience. Overall, Lockheed Martin offers a more balanced and safer investment amidst 2026 uncertainties.
Final Verdict: Which stock to choose?
Lockheed Martin’s superpower lies in its robust capital efficiency and strong value creation, evidenced by a ROIC well above its cost of capital. Its main point of vigilance is a declining profitability trend, which could signal challenges ahead. This stock suits investors with an appetite for steady cash flow and long-term resilience in an aggressive growth portfolio.
BWX Technologies commands a strategic moat through its specialized nuclear technology niche and recurring contract revenues. Its balance sheet shows greater liquidity and safety compared to Lockheed Martin, albeit at a higher valuation multiple. BWXT fits well within a GARP portfolio, appealing to those who seek growth with reasonable risk control.
If you prioritize capital efficiency and a proven ability to generate excess returns, Lockheed Martin outshines as the compelling choice due to its scale and operational strength. However, if you seek growth within a safer liquidity profile and are willing to pay a premium for niche market exposure, BWX Technologies offers better stability and strategic focus. Both carry risks tied to declining profitability trends, warranting careful monitoring.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Lockheed Martin Corporation and BWX Technologies, Inc. to enhance your investment decisions:
