The current situation between Russia and Ukraine has hugely affected the financial markets. The movement of many shares especially companies involved in the defense sector is proof. The US has spent a total of $ 54 billion, as an aid towards Ukraine.
The US is expected to increase its defense budget in the coming years. Additionally, many European and Asian countries have also upscaled their defense budget. This means fairly big contracts for international defense companies in near future.
Benefits of Investing in Defense Stocks
Investing in Defense stocks offers its own set of benefits to the investors. One of the biggest advantages for investors, seeking to invest in defense stocks, is that the companies operating within the defense sector have well-established companies which have years of history in the business. Therefore, investing in defense stocks is considered a safe investment. Stock trading advisory websites help investors make the right financial decisions.
Secondly, during the good and bad economic cycle, there is no stop to the money the government spends on defense. As a result, the defense stocks are not affected by economic recessions, which makes them a lucrative investment.
Third, many defense companies are dividend-paying companies. This feature of defense stocks gains attraction during a low-interest-rate environment.
Overall, investing in defense stocks provide exposure to the stock market. In addition to it, investors also earn a good return in terms of dividends and capital return.
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Risks and Challenges within the Defense sector
Since defense companies work directly for the government, the risk and challenges faced by these companies should not be taken lightly. Currently, the challenges this sector is facing are:
- The increased use of AI in every sector. Like every other sector, the defense sector also needs to adopt AI technology in its operations. Therefore, within the military sector, it is a huge challenge to procure, develop, and field AI solutions.
- The negative climatic impact which is caused by the multiple testing of arms weapons and other defense-related equipment is posing a huge challenge for this sector. With the global shift toward a green environment and many companies going carbon-free, there is huge pressure on the defense sector about its climate-damaging effects.
List of Best Defense Stocks to Invest in 2023
Defense stocks are considered one of the safest investments of all time. Here we have compiled a list of the 10 best defense stocks to invest in 2023:
| Sr. | Company Name | Symbol | Market Capitalization | Price as of 21st Jun 2022 |
| 1 | Raytheon Technologies | RTX | $ 138 billion | $ 92.92 |
| 2 | Lockheed Martin | LMT | $ 111.5 billion | $ 418.96 |
| 3 | Northrop Grumman | NOC | $ 72 billion | $ 463.77 |
| 4 | General Dynamics Corp. | GD | $ 60 billion | $ 216.55 |
| 5 | L3Harris Technologies | LHX | $ 44.3 billion | $ 229.6 |
| 6 | Howmet | HWM | $ 13.23 billion | $ 31.66 |
| 7 | Leidos Holdings Inc. | LDOS | $ 13.24 billion | $ 96.9 |
| 8 | Huntington Ingalls Industries, Inc | HII | $ 8.38 billion | $ 209.36 |
| 9 | Woodward Inc. | WWD | $ 5.53 billion | $ 91.16 |
| 10 | BWX Technologies Inc. | BWXT | $ 4.6 billion | $ 50.59 |
Raytheon Technologies
Raytheon Technologies is an aerospace and defense company that provides systems and services for commercial, military, and government customers. It operates through four business segments:
- Collins Aerospace Systems
- Pratt & Whitney
- Raytheon Intelligence & Space
- Raytheon Missiles & Defense
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Raytheon Technologies reported its first-quarter report for 2022:
- Sales were reported to be $ 15.7 billion, as compared to $ 15.3 billion during the previous year’s same period
- Earnings per share were reported at $ 1.15, as compared to $ 0.9 during the previous year’s same period
The 2022 outlook for the company is:
- Sales $ 67.75 billion – $ 68.75 billion
- Earnings per share of $ 4.60 – $ 4.80
Raytheon Technologies have a market capitalization of $ 138.2 billion. The share of the defense company is currently trading at $ 92.92. After a bearish year during 202, the stock of Raytheon Technologies is on a bullish run since Nov’2022.
In 2021, the stock went from $ 71.51 to $ 86.06, representing an approx. 20 % appreciation. In 2022, the stock has appreciated by approx. 8 % to date.
Studying the price forecasts of Raytheon Technologies, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 130
- Median Estimate – $ 117.5
- Low Estimate – $ 105
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Lockheed Martin
Lockheed Martin is a global security and aerospace company that is principally engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products, and services. The company is also involved in management, engineering, technical, logistical, and information support services for military endeavors. Lockheed Martin is known for military combat and air mobility aircraft, unmanned air vehicles (drones), and technologies associated with military aviation. Investing in fintech stocks is a smart investment move today.
Lockheed Martin reported its first-quarter report for 2022:
- Sales were reported at $ 15 Billion, as compared to $ 16.3 billion during the first quarter of 2021
- Segment operating profit of $ 1.7 billion, as compared to $ 1.75 billion during the first quarter of 2021
- Earnings Per Share of $ 6.44, as compared to $ 6.56 billion during the first quarter of 2021
- Generated $ 1.1 billion in free cash flow
The 2022 outlook for the company is:
- Sales of $ 66 billion
- Segment Operating Profit of $ 7.2 billion
- Earnings per share of $ 26.7
Lockheed Martin has a market capitalization of $ 111.5 billion. The share of the defense company is currently trading at $ 418.96. In 2021, the stock exhibited volatility. Despite that, the stock maintained its price level.
The year 2022 brought a huge surge in the price of Lockheed Martin stock. The stock peaked at $ 467.66. To date, the stock has appreciated by 18 %
Studying the price forecasts of Lockheed Martin, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 539
- Median Estimate – $ 500
- Low Estimate – $ 391
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Northrop Grumman
Northrop Grumman Corp. engages in the provision of security businesses. It is a global aerospace, defense, and security company. The majority of its business is with the U.S. government, principally the Department of Defense and intelligence. The company has more than 550 facilities in all 50 U.S. states and more than 25 countries around the world. Get to know the best quantum computing stocks.
The company has products, systems, and solutions in autonomous systems, cyber, command, control, communications and computers, intelligence, surveillance and reconnaissance, strike, and logistics and modernization. It operates through the following business segments:
- Aerospace Systems
- Innovation Systems
- Mission Systems
- Technology Services.
Northrop Gunman reported first-quarter results for 2022:
- Sales were reported to be $ 8.8 billion, an increase of 2 % from the previous year’s same period
- Earnings per share of $ 6.1, a 7 % decline from the previous year’s same period
The 2022 outlook for the company is:
- Sales of $ 36 billion to $36.6 billion
- Earnings per share of $ 24.50 to $ 25.10
Northrop Grumman has a market capitalization of $ 72.1 billion. The share of the defense company is currently trading at $ 463.77. The stock of Northrop Grumman has been on a bullish run since 2021. In 2021, the stock went from $ 304.72 to $ 387.07, representing a 27 % increase during the year.
The year 2022 brought a huge surge in the price of Northrop Grumman stock. The stock has appreciated by approx. 20 % to date
Studying the price forecasts of Northrop Grumman, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 550
- Median Estimate – $ 490
- Low Estimate – $ 377
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General Dynamics Corp.
General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems, and munitions; and technology products and services.
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General Dynamics Corp reported its first-quarter report for 2022:
- Revenue of $ 9.4 billion as compared to $ 9.4 billion revenue during the first quarter of 2021
- Net earnings of $ 730 million, as compared to $ 708 million revenue during the first quarter of 2021
- Diluted EPS of $ 2.61 an increase of 5.2 % year over year
General Dynamics Corp has a market capitalization of $ 60.1 billion. The share of the defense company is currently trading at $ 216.55. The stock of General Dynamics Corp has been on a bullish run since 2021. In 2021, the stock went from $ 148.82 to $ 208.47, representing a whopping 40 % increase during the year.
In 2022 after hitting $ 245, the stock declined. To date, the stock has appreciated by 4 %.
Studying the price forecasts of General Dynamics Corp, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 305
- Median Estimate – $ 273.5
- Low Estimate – $ 221
L3Harris Technologies
L3Harris Technologies is an agile global aerospace and defense technology innovator, delivering end-to-end solutions that meet customers’ mission-critical needs. The company provides advanced defense and commercial technologies across space, air, land, sea, and cyber domains. Cybersecurity stocks are also one of the best investment opportunities.
L3Harris Released first quarter 2022 results:
- Revenue was reported to be $ 4.1 billion, a 5 % decline from the previous year’s same period
- Segment Operating Income was reported at $ 656 million, a 12 % decline from the previous year’s same period
- Earnings per share were reported at $ 3.12, a 2 % decline from the previous year’s same period
The company’s 2022 outlook is:
- Revenue at $ 17.3 billion – $ 17.7 billion
- Earnings per share at $ 10.75 – $ 11.05
L3Harris Technologies have a market capitalization of $ 44.3 billion. The share of the defense company is currently trading at $ 229.6. The stock of L3Harris Technologies has been on a bullish run for the past two years. In 2021, the stock went from $ 189.02 to $ 213.24, representing a 13 % % increase during the year.
In 2022, the stock peaked at $ 266. After that, the stock declined. To date, the stock has appreciated by 8 %.
Studying the price forecasts of L3Harris Technologies, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 332
- Median Estimate – $ 285
- Low Estimate – $ 197
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Howmet Aerospace Inc.
Howmet Aerospace is a global leader in engineered metal products. It operates through the following segments:
- Engineered Products and Forgings (EP&F) – This segment produces products that are used primarily in the aerospace, industrial, commercial transportation, and power generation end markets
- Global Rolled Products (GRP) – This segment produces aluminum sheet and plate, aluminum extruded and machined parts, integrated aluminum structural systems, and architectural extrusions used in the automotive, aerospace, building and construction, industrial, packaging, and commercial transportation end markets
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Howmet Aerospace reports first quarter 2022 results:
- Revenue of $ 1.32 billion, an increase of 10 % year over year
- Net income of $ 131 million as compared to $80 million in the first quarter of 2021
- Earnings per share of $ 0.31 per share, as compared to $ 0.18 per share, in the first quarter of 2021
The company’s 2022 outlook is:
- Revenue $ 5.56 billion to $ 5.72 billion
- Earnings per share $ 1.33 to $ 1.45
- Free cash flow $ 575 million to $ 675 million
Howmet Aerospace Inc has a market capitalization of $ 13.3 billion. The share of the defense company is currently trading at $ 31.66. The stock of Howmet Aerospace Inc has been steadily rising, for the past two years. In 2021, the stock went from $ 28.54 to $ 31.83, representing an 11.5 % increase during the year.
In 2022, the stock has experienced multiple dips and peaks. Despite that, the stock has maintained its price level.
Studying the price forecasts of Howmet Aerospace Inc., the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 46
- Median Estimate – $ 42
- Low Estimate – $ 38
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Leidos Holdings Inc.
Leidos is a Fortune 500 technology, engineering, and science solutions and services leader working to solve the world’s toughest challenges in the defense, intelligence, civil, and health markets. With the demand for AI technology increasing, investor interest in Artificial Intelligence stocks has also increased. It operates through the following three segments:
- Defense Solutions
- Civil
- Health.
Leidos Holdings, Inc. reports the first-quarter fiscal year 2022 results:
- Revenue of $ 3.5 billion, an increase of 5% year-over-year
- Net Income of $ 177 million, as compared to $ 205 million the previous year same period
- Diluted Earnings per Share of $1.25
- Free Cash Flow of $65 million
Leidos Holdings Inc. has a market capitalization of $ 13.24 billion. The share of the defense company is currently trading at $ 96.6. The stock of Leidos Holdings Inc has been extremely volatile for the past two years. The stock plunged multiple times and rose again multiple times during these past two years. In 2021, the stock went from $ 105.12 to $ 88.9, representing a 15.4 % decline during the year.
In 2022, the stock continued its volatility. To date, the stock appreciated by 9 %.
Studying the price forecasts of Leidos Holdings Inc, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 130
- Median Estimate – $ 118
- Low Estimate – $ 105
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Huntington Ingalls Industries, Inc
Huntington Ingalls Industries Inc (HII) is a provider of engineering and defense technologies. It designs, builds, and maintains nuclear and non-nuclear ships for the US Navy and Coast Guard. The product portfolio includes:
- Aircraft carriers
- Surface combatants
- Composite deckhouses
- Hangars,
- Transport dock ship
- Amphibious assault ships
- National security cutters
- Submarines.
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It provides construction, refueling, complex overhaul, technical and engineering, and design services related to aircraft carriers and submarines. It also provides advanced unmanned maritime solutions for marine research, defense, and commercial applications.
Huntington Ingalls Industries Inc reports first quarter 2022 results:
- Revenues were recorded at $ 2.6 billion, up by 13.1% from the first quarter of 2021
- Segment operating was recorded at $ 176 million compared to $ 191 million in the first quarter of 2021.
- Net earnings of $140 million, compared to $ 148 million in the first quarter of 2021.
- Earnings per share of $3.50 compared to $ 3.69 in the first quarter of 2021.
Huntington Ingalls Industries Inc. has a market capitalization of $ 8.4 billion. The share of the defense company is currently trading at $ 209.6. The stock of Huntington Ingalls Industries Inc has been bullish during 2021. The year 2022 is marked by volatility.
In 2021, the stock of HII went from $ 170.48 to $ 186.74, representing a 10 % appreciation.
In 2022, the stock continued its bullish journey. To date, the stock has appreciated by 12 %
Studying the price forecasts of Huntington Ingalls Industries Inc, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 270
- Median Estimate – $ 233
- Low Estimate – $ 179
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Woodward Inc.
Woodward is the global leader in the design, manufacturing, and service of energy conversion and control solutions for the aerospace and industrial equipment markets. The company operates through two segments:
- Aerospace – This segment provides fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles, and flight deck controls, actuators, servo controls, motors, and sensors for aircraft.
- Industrial – This segment offers actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, speed controls, electronics and software, and sensors
Woodward, Inc. reported financial results for its first quarter of the fiscal year 2022:
- Net sales were $ 542 million, compared to $ 538 million in the previous year’s same period
- Net earnings were $ 30 million, compared to net earnings of $42 million in the previous year’s same period
- Earnings per share were $ 0.47 per share as compared to earnings per share of $ 0.64 per share in the previous year’s same period
The company’s outlook for 2022 is:
- Net sales at $ 2.45 and $ 2.65 billion
- Earnings per share at $ 3.55 and $ 3.95
- Free cash flow at $ 315 million
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Woodward Inc. has a market capitalization of $ 5.52 billion. The share of the defense company is currently trading at $ 91.16. The stock of Woodward Inc spiked during the last quarter of 2020. Since then, it has been exhibiting slight volatility.
In 2021, the stock of Woodward went from $ 121.53 to $ 109.46, representing a 10 % decline.
In 2022, the stock took a huge dip downward. To date, the stock has declined by 16.4 %.
Studying the price forecasts of Woodward Inc, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 138
- Median Estimate – $ 120.5
- Low Estimate – $ 91
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BWX Technologies Inc.
BWX Technologies, Inc. manufactures and sells nuclear components in the United States, Canada, and internationally. It provides technical, management, and site services to support governments in the operation of complex facilities and environmental restoration activities; and supplies precision manufactured components, services, and CANDU® fuel for the commercial nuclear power industry. It operates in three segments:
- Nuclear Operations Group
- Nuclear Power Group
- Nuclear Services Group
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BWX Technologies Reports First Quarter 2022 Results:
- Revenue of $ 531 million, as compared with $528 million in the first quarter of 2021.
- Net income was $ 59.0 million, compared with a net income of $69.7 million in the prior-year period
- Earnings per share were $ 0.64 compared with Earnings per share of $ 0.73, in the prior-year period
The company’s outlook for 2022 is:
- Revenue to increase by 3% to 4%
- Earnings per share at $ 3.05 to $ 3.25
- Cash from operations: $260 million to $290 million
BWX Technologies Inc. has a market capitalization of $ 4. billion. The share of the defense company is currently trading at $ 50.59. The stock of BWX Technologies Inc has been volatile with a mixed trend in the past two years.
The year 2021 started with a bullish trend and ended with a bearish trend. Overall, the stock declined by 21 % during the year.
In 2022, the stock took a big jump upwards. To date, the stock has appreciated by 6 %.
Studying the price forecasts of BWX Technologies Inc, the CNN Money Analysts have predicted a 12-month price forecast of:
- High Estimate – $ 77
- Median Estimate – $ 65
- Low Estimate – $ 51
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