If you are worried about how defense budget cuts could effect Northrop Grumman, than keep an eye on how it progresses in attracting commercial clients for cyber security. This company has a long ways to go to lessen their 90% government dependence.
Harnessing the ocean
Lockheed Martin Corporation (NYSE:LMT) is looking to become the king of the ocean. It has two major oceanic projects in front of them right now.
The first is related to a product called Perforene. The company intends to use this incredibly thin and remarkably strong product as a filter for salt water. Given how thin it is, it is able to filter out the salt at about 1% of the energy output typically required to do this.
In other words, with Perforene Lockheed Martin Corporation (NYSE:LMT) has successfully made salt-water filters a viable solution to solve the world’s water needs. The company stated that i has already identified 83 countries that could use this technology now.
But sticking with the seas, Lockheed Martin Corporation (NYSE:LMT) is also looking to solve energy problems through Ocean Thermal Energy Conversion. The system uses warm surface water, and cooler deep water and turns them into clean energy. Recent deals in China prove that this technology is moving forward.
Smartphones?
Believe it or not, defense contractor General Dynamics Corporation (NYSE:GD) has inked a deal with Samsung (NASDAQOTH: SSNLF) to provide security to Samsung devices. This comes at a time when competitor Apple Inc. (NASDAQ:AAPL) has been struggling with security issues. So, do you need your phone to be a fortress? Might want to look into Samsung.
For most, security strangely isn’t a big deal. One survey found that only half of smartphone users even considered security when selecting a phone. Price and ease of use were bigger factors for the consumers. To which I say, smartphone security is still a relatively new need.
Not too many people knew what identity theft was just 15 years ago. Fewer knew how to prevent it. As people grow in their understanding, it will become a bigger issue for them. The Samsung deal with GD may prove to be a competitive advantage that no other smartphone can touch.
For General Dynamics Corporation (NYSE:GD), this is just a demonstration that even some of its government revenue streams can be converted to have commercial application. However this revenue is still a long shot from the kind of revenue they would need to soften a budget cut blow. It is a good step, but if you’re worried about budget cuts, you should wait for a little more from the company.
The winner
While all of these contractors are spending on research and development, and all of them are searching for new streams of revenue, I really believe that one is actually making big strides to be not so dependent on Capitol Hill. Lockheed Martin Corporation (NYSE:LMT) is serious about this. The company isn’t just tinkering around. The goal is to “capitalize on the market that we hope to be in five to eight years from now.” As buy-and-hold investors, a long-term vision from the company is a huge plus in my book.
Catch that phrase “the market we hope to be in.” Lockheed Martin Corporation (NYSE:LMT) isn’t sitting idly by. It is proactively seeking a solution to its 82% government revenue. I’ve highlighted two of the most promising technologies that look to accomplish this. I admit, the Batmobile is way cooler. But what Lockheed Martin Corporation (NYSE:LMT) has brewing in their R&D is almost as cool as Batman.
The article Almost as Cool as Batman originally appeared on Fool.com and is written by Jon Quast.
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