The Sleeper: Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT) has seen a modest decline of 7% in the last year. Over the past five years, LMT stock has returned a respectable 48%, appearing undervalued with a forward price-earnings ratio of 16.8 and a 2.88% dividend yield.
Rising global defense spending is a promising sign for Lockheed, particularly with NATO countries increasing military expenditures. The company closed 2023 with a record backlog of $160.6 billion, indicating potential future revenue acceleration. Additionally, a projected free cash flow of $6.2 billion for the year suggests continued value creation through dividends and share repurchases.
The Awakening: AstraZeneca (AZN)
AstraZeneca (NASDAQ:AZN) stands as another subdued blue-chip stock, boasting a forward price-earnings ratio of 15.7 and a 2.2% dividend yield. Despite biopharmaceutical neglect post-pandemic, AstraZeneca’s drug portfolio addresses a wide range of global health issues, hinting at strong growth potential.
The company’s pipeline of 178 projects, including 17 late-stage entities, and the potential for 10 blockbuster drugs from phase III trials, forecast robust revenue growth. AstraZeneca’s 35% year-on-year growth in emerging markets further solidifies its global presence and diversification.
Rising from Slumber: Occidental Petroleum (OXY)
Occidental Petroleum (NYSE:OXY) has shown a 9% increase in the last year, hinting at future potential. With an undervalued stance and a 1.37% dividend yield, OXY seems poised for further growth, along with steady dividend expansion in the near term.
The recent surge in oil prices, along with OPEC’s anticipated production cuts and geopolitical tensions, sets the stage for increased oil value. Occidental, with its sturdy balance sheet and $5.5 billion free cash flow reported last year, is well-equipped to benefit from the rising oil prices and is expected to be a significant value creator going forward.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
