Investors have seen significant gains in defense stocks over the past decade, with returns averaging 12.7% annually. If you’re considering investing in this sector, you’ll want to check out our handpicked selection of the top 5 defense stocks. We’ve analyzed these stocks based on their expected 5-year returns, factoring in dividend yields, earnings growth, and valuation changes.
Defense Stock #5: General Dynamics (GD)
- Estimated Annual Returns: 2.2%
General Dynamics, a Dividend Aristocrat, stands out with over 30 consecutive years of dividend increases. The company operates in Aerospace and Combat Systems, with a focus on high-end private jets and combat vehicles. Despite mixed Q2 2024 results, General Dynamics maintains a strong position in the defense industry.
Defense Stock #4: Raytheon Technologies (RTX)
- Estimated Annual Returns: 2.7%
Following a merger in 2020, Raytheon Technologies is now a major player in aerospace and defense. With a strong financial performance in Q2 2024, the company reported revenue growth and record backlogs. Raytheon Technologies is poised for future growth with a diverse portfolio.
Defense Stock #3: Northrop Grumman (NOC)
- Estimated Total Returns: 3.3%
Northrop Grumman boasts a wide range of defense offerings, from aircraft to space systems. The company excelled in Q2 FY 2024, demonstrating revenue growth and strong performance in key segments. With consistent innovation and revenue streams, Northrop Grumman is a solid choice for defense investors.
Defense Stock #2: L3Harris Technologies (LHX)
- Estimated Annual Returns: 4.2%
A product of a merger, L3Harris Technologies is a significant defense contractor with a focus on government sales. Despite mixed results in Q2 2024, the company reported revenue growth and margin improvements. With a diverse business structure, L3Harris Technologies is well-positioned for future success.
Defense Stock #1: Huntington Ingalls Industries Inc. (HII)
- Estimated Annual Returns: 4.4%
Specializing in shipbuilding for the U.S. Navy, Huntington Ingalls Industries is a key player in the defense sector. The company’s strong performance in Q2 2024 reflects its stability and growth potential. With a focus on naval vessels and mission technologies, Huntington Ingalls Industries offers solid investment opportunities.
In conclusion, while defense stocks have seen remarkable growth, investors should be cautious of inflated valuations. Although none of the listed stocks presently meet the buy rating criterion, a potential pullback could present buying opportunities. For investors looking to capitalize on the defense sector, staying informed and patient is key to navigating this dynamic market.
