In this article, we discuss the 5 best passive income stocks in 2021. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Passive Income Stocks in 2021.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind, let’s take a look at the best passive income stocks in 2021:
5. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 50
Ranking 5th in our list of the 10 best passive income stocks in 2021 is Lockheed Martin Corporation (NYSE:LMT). The Maryland-based global security and aerospace company produces advanced technology systems including aircraft, space launchers, satellites, and defense systems. The company’s dividend has been increased every year for the past 18 years. In 2020, Lockheed Martin Corporation agreed to buy Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD) in a binding agreement that is expected to close in the second half of 2021. The acquisition will allow the company to enhance the domestic defense industrial base while lowering costs for our customers and the American taxpayer.
Lockheed Martin Corporation (NYSE:LMT) posted its net sales of $16.3 billion in the first quarter of 2021, up from $15.7 billion in the same period of 2020. LMT shares currently trade for $385 and have a P/E of 15.54. The current dividend yield is 2.72%. The 52-week price range of Lockheed Martin Corporation (NYSE:LMT) is $319.81-417.62. Shares of LMT jumped 12% in the last three months.
There were 50 hedge funds that reported owning stakes in Lockheed Martin Corporation (NYSE:LMT) at the end of the first quarter, down from 53 funds a quarter earlier. The total value of these stakes at the end of Q1 is $2.29 billion.
“Despite better-than-expected third quarter results, LMT shares were weak for the quarter as defense spending is expected to be flat for the coming year. With a record $150 billion backlog and almost 30% of its revenue coming from building F-35 aircraft with deliveries forecast to reach 180 per year in 4-5 years (3Q’s revenue upside was from the F-35), we believe LMT should grow at a higher rate than overall defense budget growth and Street expectations over the next several years. Further, strategic acquisitions (LMT acquired AJRD for $4 billion in late December), debt pay down, a 3% dividend yield, and continued share buybacks from $6 billion per year of free cash flow should lead to even greater shareholder returns.”