Purchase boosts Leidos’s appeal

Article Excerpt

LEIDOS HOLDINGS INC. $101 is a buy. The company (New York symbol LDOS; Manufacturing sector; Shares o/s: 141.9 million; Market cap: $14.3 billion; Dividend yield: 1.3%; Takeover Target Rating: Highest; www.leidos.com) took its current form in August 2016 when Lockheed Martin (New York symbol LMT) separated its Information Systems & Global Solutions (IS&GS) business and then merged it with Leidos. The company is now paying $380 million in cash for Gibbs & Cox Inc., a Virginia-based full-service engineering and design firm specializing in naval ship design. The purchase will strengthen Leidos’s ability to win more defence design contracts, particularly in the emerging area of unmanned vessels. In the quarter ended January 1, 2021, Leidos’ revenue rose 10.1%, to $3.25 billion from $2.95 billion a year earlier. Excluding one-time items, the company earned $234 million, or $1.63 a share. That’s up 7.8% from $217 million, or $1.51 a share. Leidos is a buy for aggressive investors. investors. …