Major U.S. defense contractors spent far more on shareholder returns than on new factories over the past five years, prompting President Donald Trump to demand an end to buybacks and dividends until companies boost investment.
Lockheed Martin (LMT), RTX (RTX), Boeing (BA), Northrop Grumman (NOC) and General Dynamics (GD) spent more than $110 billion on buybacks and dividends since 2020, compared with about $45.5 billion on capital expenditures, Bloomberg News reported Thursday.
But analysts warn that simply redirecting cash may backfire, as civil and defense operations are often tightly linked. Even with funding, scaling production is constrained by limited suppliers for high-end components. The Pentagon is trying to address capacity by offering demand certainty, including a seven-year deal with Lockheed (LMT) to triple Patriot missile output.