๐ง๐ต๐ฒ ๐ง๐ฟ๐๐บ๐ฝ ๐ฒ๐ณ๐ณ๐ฒ๐ฐ๐ ๐ผ๐ป ๐ผ๐๐ฟ ๐ฝ๐ผ๐ฟ๐๐ณ๐ผ๐น๐ถ๐ผ ๐๐ต๐ถ๐ ๐๐ฒ๐ฒ๐ธ
Dear Copiers,
On Wednesday, President Trump announced several policy proposals. Three of those directly affect two of our companies - namely $LMT (Lockheed Martin Corporation) and $DHI (D.R. Horton Inc)
๐๐ผ๐ฐ๐ธ๐ต๐ฒ๐ฒ๐ฑ ๐ ๐ฎ๐ฟ๐๐ถ๐ป
As reported by Bloomberg, ๐ฃ๐ฟ๐ฒ๐๐ถ๐ฑ๐ฒ๐ป๐ ๐ง๐ฟ๐๐บ๐ฝ "๐๐ผ๐๐น๐ฑ๐ป'๐ ๐ฎ๐น๐น๐ผ๐ ๐ฑ๐ฒ๐ณ๐ฒ๐ป๐๐ฒ ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ป๐ถ๐ฒ๐ ๐๐ผ ๐ถ๐๐๐๐ฒ ๐ฑ๐ถ๐๐ถ๐ฑ๐ฒ๐ป๐ฑ๐ ๐ผ๐ฟ ๐ฏ๐๐ ๐ฏ๐ฎ๐ฐ๐ธ ๐๐ต๐ฒ๐ถ๐ฟ ๐ผ๐๐ป ๐๐๐ผ๐ฐ๐ธ ๐๐ป๐๐ถ๐น ๐๐ต๐ฒ๐ ๐ถ๐ป๐๐ฒ๐๐ ๐บ๐ผ๐ฟ๐ฒ ๐ถ๐ป ๐ฝ๐ฟ๐ผ๐ฑ๐๐ฐ๐๐ถ๐ผ๐ป ๐ฎ๐ป๐ฑ ๐ฟ๐ฒ๐๐ฒ๐ฎ๐ฟ๐ฐ๐ต".
Lockheed Martin have a dividend yield of 2.66%. That's calculated by multiplying the quarterly dividend of $3.45 by 4 to get an annual dividend of $13.80 (this is a pretax figure). To get the yield we divide the dividend by the share price and multiply by 100. ($13.80/$518.44)*100 = 2.66%
This isn't considered a huge dividend yield in the eyes of income funds but if Lockheed Martin were not allowed to issue dividends then income funds, due to their mandate, would be forced to sell their Lockheed Martin shares - this would create temporary downward pressure on the share price.
Lockheed Martin also repurchase their shares. Over the last 12 months, Lockheed Martin reduced there outstanding shares by 5.6 million or 2.4% of the shares outstanding.
There is, of course, one giant hole in Trump's proposal - he did not quantify how much more a defense company would need to invest before they'd be allowed to issue dividends or buyback stock. Would they need to spend $1m more, $1B more, $10B more? We just don't know.
It must be noted that issuing dividends and repurchasing shares can be a perfectly rational use of corporate assets. Managers have three investment options available - reinvest cash into new projects to expand the company, issue dividends or repurchase shares. In an ideal world they'd invest rationally - reinvesting in the company only when it'll create shareholder value, repurchasing shares when they are considered undervalued and issuing dividends when the other two options are unappealing. Unfortunately we don't live in an ideal world.
๐ง๐ฟ๐๐บ๐ฝ ๐ฎ๐น๐๐ผ ๐ฑ๐ฒ๐บ๐ฎ๐ป๐ฑ๐ฒ๐ฑ "๐๐ต๐ฒ ๐จ๐ฆ ๐ฏ๐ผ๐ผ๐๐ ๐ฎ๐ป๐ป๐๐ฎ๐น ๐ฑ๐ฒ๐ณ๐ฒ๐ป๐๐ฒ ๐๐ฝ๐ฒ๐ป๐ฑ๐ถ๐ป๐ด ๐ฏ๐ ๐บ๐ผ๐ฟ๐ฒ ๐๐ต๐ฎ๐ป ๐ฑ๐ฌ% ๐๐ผ $๐ญ.๐ฑ ๐๐ฟ๐ถ๐น๐น๐ถ๐ผ๐ป ๐ณ๐ผ๐ฟ ๐ฎ๐ฌ๐ฎ๐ณ."
The US government is Lockheed Martin's largest customer and accounted for 72% of their sales in 2025. 63% of their revenue was from US defense spending. As the largest American listed defense company, any rise in US defense spending is likely to be good news for Lockheed Martin.
Effectively, Trump issued bad news followed by very positive news for Lockheed Martin. This sent the share price higher by 4.34% the following day.
๐. ๐ฅ. ๐๐ผ๐ฟ๐๐ผ๐ป
Trump said he would ban institutional investors from buying single-family homes.
Known as America's Builder, D. R. Horton primarily sells houses to individuals. However, they have a build to rent program whereby they build new communities, rent those properties and then bulk sell those rented properties to institutional investors. From their latest annual report, sales to institutional investors accounted for 4.6% of their revenue and 3.6% of their pretax income.
Trump's announcement would be a restriction on sales to D. R. Horton but any easy way to navigate that would be to either hold on to those rental properties and become a landlord or sell these properties to individuals.
In short, I believe this proposal will not be harmful to the company and I also do not think it will address the affordability issues of the US housing market.
The market agreed with me - D. R. Horton's shares rose 4.73% the day after the announcement.
... Show More
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Sun Feb 15 2026 02:03:19 GMT+0000 (Coordinated Universal Time)
