Are Investors Undervaluing Lockheed Martin (LMT) Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Lockheed Martin (LMT) is a stock many investors are watching right now. LMT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 14.28, while its industry has an average P/E of 19.71. Over the past 52 weeks, LMT's Forward P/E has been as high as 18.46 and as low as 11.22, with a median of 15.92.

We also note that LMT holds a PEG ratio of 2.06. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LMT's PEG compares to its industry's average PEG of 2.08. LMT's PEG has been as high as 2.73 and as low as 1.63, with a median of 2.25, all within the past year.

Finally, our model also underscores that LMT has a P/CF ratio of 13.20. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 18.35. Over the past 52 weeks, LMT's P/CF has been as high as 16.77 and as low as 10.55, with a median of 14.68.

These are only a few of the key metrics included in Lockheed Martin's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LMT looks like an impressive value stock at the moment.

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