Lockheed & Texas Instruments: Early 2026 Performance

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The broad market’s tepid start to 2026 has, predictably, shifted investor attention toward defensive allocations. While the S&P 500 has registered a modest gain, certain dividend-paying equities have demonstrated relative strength. We examine two such instances: Lockheed Martin and Texas Instruments.

Lockheed Martin: A Resurgent Defense Contractor

Lockheed Martin (LMT) has experienced a notable price appreciation in the initial weeks of 2026, up approximately 32% year-to-date. This performance represents a reversal from the relative stagnation observed in 2025. The company’s recent earnings release revealed a record backlog of $194 billion, exceeding internal expectations. This figure suggests sustained demand driven by geopolitical factors and ongoing government contracts.

Several factors warrant consideration. The defense sector, while often perceived as stable, is not immune to budgetary pressures and shifting political priorities. However, Lockheed Martin’s entrenched relationships with key government agencies and its diversified product portfolio mitigate some of these risks.

  • Backlog Sustainability: The ability to convert the substantial backlog into revenue and maintain healthy margins remains a critical factor.
  • Geopolitical Landscape: Escalating global tensions could further bolster demand, but also introduce unforeseen operational challenges.
  • Valuation: At 21 times forward earnings, the current valuation appears reasonable, though not inexpensive, given the inherent cyclicality of the defense industry.

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The current dividend yield of 2.2% offers a modest income stream, roughly double the S&P 500 average. For long-term investors seeking a blend of capital appreciation and dividend income, Lockheed Martin merits further scrutiny.

Texas Instruments: Semiconductor Resilience

Texas Instruments (TXN) has also exhibited strong performance in early 2026, with a price increase exceeding 26%. Recent earnings data indicate a 10% year-over-year revenue increase in the fourth quarter of 2025, driven primarily by robust demand from the data center sector. This suggests a degree of resilience in the face of broader semiconductor industry headwinds.

The company’s diversified product portfolio, encompassing over 80,000 parts, serves a wide range of industries, potentially reducing its exposure to any single end market. However, the semiconductor sector is inherently cyclical and subject to rapid technological obsolescence.

  • Data Center Dependency: The reliance on data center demand, while currently favorable, presents a concentration risk. A slowdown in this sector could significantly impact revenue.
  • Competitive Landscape: The semiconductor industry is intensely competitive. Maintaining market share requires continuous innovation and capital investment.
  • Valuation Concerns: A forward price-to-earnings multiple of 33 reflects optimistic growth expectations. Any deviation from projected growth rates could lead to valuation compression.

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Texas Instruments offers an above-average dividend yield of 2.6%, with a 22-year streak of consecutive dividend increases. This record demonstrates a commitment to returning capital to shareholders. However, investors should carefully assess the sustainability of this dividend in the context of potential cyclical downturns.

In conclusion, both Lockheed Martin and Texas Instruments have demonstrated relative strength in a challenging market environment. While each company presents unique opportunities and risks, a thorough analysis of their respective fundamentals and industry dynamics is essential before making any investment decisions.

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2026-02-10 13:02