The War Economy: Top 4 Defence Stocks to Watch Right Now
If there’s one sector that consistently thrives regardless of economic downturns, it’s defence. With global tensions simmering at a perpetual boil, nations are throwing money at military contracts like confetti at a parade. That means investors looking for stability and growth should take a serious look at defence stocks.
Here are four of the highest-performing defence companies, in my portfolio right now, with an analysis and verdict on whether they’re a Buy, Hold, or Sell.
Lockheed Martin (NYSE: LMT)
The Titan of Defence Spending
Lockheed Martin remains the undisputed leader in military contracts, thanks to its dominance in aerospace, missile defence, and cutting-edge military technology. With continued F-35 fighter jet sales, hypersonic weapons programs, and lucrative Pentagon contracts, LMT is positioned for steady revenue growth.
Performance & Outlook:
Stock Price: Up 15% in the past year
Revenue Growth: Consistently strong, with a backlog exceeding $160 billion
Dividend Yield: A solid 2.6%
Verdict: BUY
Lockheed is the blue-chip of defence stocks. Strong fundamentals, steady government contracts, and global demand make it a long-term winner.
Northrop Grumman (NYSE: NOC)
The Stealth Giant
Northrop Grumman is a major player in military aircraft, space, and cyber warfare. The company’s involvement in the B-21 Raider stealth bomber program and its role in classified government contracts ensure a strong future.
Performance & Outlook:
Stock Price: Up 20% year-to-date
Revenue Growth: Accelerating, especially in classified space projects
Dividend Yield: 1.8%
Verdict: BUY
With a heavy focus on next-gen warfare, particularly in space and cybersecurity, Northrop Grumman is well-positioned for growth. A solid long-term investment.
Raytheon Technologies (NYSE: RTX)
Missiles & Innovation
Raytheon Technologies is a powerhouse in missile defence systems, hypersonics, and aerospace. The company’s recent restructuring post-United Technologies merger has strengthened its financials. However, supply chain challenges and shifting geopolitical priorities have been a headwind.
Performance & Outlook:
Stock Price: Up 10% this year, but still recovering from post-merger turbulence
Revenue Growth: Consistent, though slightly behind competitors
Dividend Yield: 2.3%
Verdict: HOLD
Raytheon remains a strong company but is facing supply chain and cost challenges. Hold for now, but keep an eye on improving financials.
General Dynamics (NYSE: GD)
Under-the-Radar Defence Play
General Dynamics is a diversified defence contractor with a strong presence in submarines, ground combat systems, and Gulfstream business jets. While overshadowed by Lockheed and Northrop, it has quietly delivered solid earnings growth.
Performance & Outlook:
Stock Price: Up 12% year-to-date
Revenue Growth: Steady, with strong demand for submarines and cybersecurity services
Dividend Yield: 2.4%
Verdict: BUY
A well-balanced defence stock with solid fundamentals. Good long-term play with a healthy dividend yield.
Final Thought
Defence stocks continue to be a safe harbour in an uncertain world. While global markets fluctuate, one thing remains constant: governments will always fund their military. Whether it’s fighter jets, missile defence, or next-gen warfare in space, these companies are printing money off taxpayer-backed budgets.
Bill White Says...
"If there's one industry that never experiences a recession, it's the business of war. Unlike politicians, defence stocks actually deliver on their promises."