Last week President Trump declared that U.S. defense contractors had to stop spending money on dividends and share buyback programs so that the companies could redirect that money to expanding the country’s defense base.

Calcbench takes no view on the political or legal practicalities of such a move, but it did make us wonder — how much money are we talking about here, anyway? 

Thanks to our Bulk Data Query and Multi-Company pages, we quickly found the answer. Let’s start with six major defense contractors in the United States:

• RTX Corp. ($RTX)

• Lockheed Martin ($LMT)

• Northrop Grumman ($NOC)

• Huntington Ingalls ($HII)

• Leidos ($LDOS)

• General Dynamics ($GD)

Using our Multi-Company page, we quickly found the amounts that each firm spent on capital expenditures, dividends, and share repurchases in 2024. See Figure 1, below.

The amounts vary widely, depending on each firm’s overall size. Perhaps more important for financial analysis is to look at the relative spending among the three categories by each firm. 

For example, Huntington Ingalls (shipbuilder) didn’t spend much on capex, but it spent even less on dividends and share repurchases. So while redirecting dividend and repurchasing money to capex would be a significant shift, it wouldn’t necessarily be a huge shift. 

Contrast that to Lockheed Martin’s position. The company is more than six times larger than Huntington in terms of revenue ($11.5 billion versus $71 billion) and spends far more on capex — but it spends even larger sums on dividends and on share repurchases. If Lockheed redirects all that money into capex, that is a huge shift in spending.

Then we used our Bulk Data Query page to examine Lockheed Martin specifically, to see how its spending fluctuated over time. See Figure 2, below. (This time we added free cash flow too, just because we could.)

As you can see, capex and dividend spending held quite steady over the last five years. Repurchase spending fluctuated substantially, although that’s not surprising when you think about it. Companies wanted to protect cash during the pandemic, and stock prices were rising briskly in those same years; then the markets tanked in 2022, which was a good time for confident companies to repurchase shares on the cheap.

Anyway, Figure 2 gives us a sense of how Lockheed’s free cash flow and spending have evolved over time, which lets you ponder how those same things might continue to change if Lockheed does indeed stop spending on dividends and repurchases.

Will Lockheed (or any other defense contractor, for that matter) actually shift all its dividend and share repurchase funds into capital investments, personnel, and other costs to accelerate weapons delivery? We have no idea. The president’s executive order isn’t clear on specifics, such as whether a company must redirect all those monies or just some; or redirect all the money right away versus following some sliding schedule over time. What about a company using those monies to acquire other businesses instead; does that count?  

Analysts will have to wait and see — but Calcbench does have the data to let you model out various scenarios and their consequences, so you won’t be caught by surprise as those specifics become more clear.