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Should Investors Consider These 3 Top-Ranked Defense Stocks?
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Defense-related stocks have caught the attention of investors over the last year as geopolitical tensions around the world heat up. For example, the Zacks Aerospace sector has widely outperformed the S&P 500 since the beginning of 2022, as we can see in the chart below.
Image Source: Zacks Investment Research
And with countries increasing their defense budgets, these companies’ products and services will likely remain in high demand.
In addition, the Zacks Aerospace sector is currently ranked #1 out of all 16 Zacks sectors, indicating that companies within have witnessed positive earnings estimate revisions.
For those interested in tapping into the improved outlook, three top-ranked stocks – Northrop Grumman (NOC - Free Report) , Raytheon Technologies (RTX - Free Report) , and Curtiss-Wright (CW - Free Report) – could all be considerations.
Northrop Grumman
Northrop Grumman is a global aerospace and defense company that provides advanced technology solutions for a range of industries. Presently, the stock carries a Zacks Rank #2 (Buy), with earnings estimates inching higher.
Image Source: Zacks Investment Research
The company posted solid quarterly results in its latest release, exceeding the Zacks Consensus EPS Estimate by more than 13%. Quarterly revenue totaled $10.1 billion, 4% ahead of expectations and improving nicely from year-ago sales of $8.6 billion.
Image Source: Zacks Investment Research
And for the cherry on top, Northrop has shown a commitment to increasingly rewarding its shareholders, boasting a 9% five-year annualized dividend growth rate.
Currently, NOC’s dividend yields 1.5% annually.
Image Source: Zacks Investment Research
Raytheon Technologies
Raytheon Technologies provides advanced systems and services worldwide for commercial, military, and government customers. Like NOC, Raytheon sports a favorable Zacks Rank #2 (Buy).
RTX shares aren’t expensive by any stretch, with the current 19.8X forward earnings multiple nearly in line with the five-year median and well below the Zacks Aerospace sector average.
Image Source: Zacks Investment Research
The company’s cash-generating abilities recently saw a solid bump; Raytheon reported free cash flow of $3.7 billion in its latest release, improving 70% year-over-year.
Image Source: Zacks Investment Research
Curtiss-Wright
Curtiss-Wright specializes in producing a wide range of high-tech products and services for various industries, such as aerospace, defense, and industrial markets. The company’s earnings outlook has modestly drifted higher, helping land it into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
In addition, the company’s 16.5% trailing twelve-month return on equity (ROE) is well above the Zacks sector average, indicating a higher efficiency in generating profit from existing assets.
Image Source: Zacks Investment Research
Bottom Line
Investors have found interest in defense stocks following rising geopolitical tensions. And as long as countries continue increasing their defensive budget, these defense companies will continue to generate demand.
All three defense stocks above – Northrop Grumman (NOC - Free Report) , Raytheon Technologies (RTX - Free Report) , and Curtiss-Wright (CW - Free Report) – could be considerations for investors seeking exposure.
All three sport a favorable Zacks Rank, indicating optimistic near-term business outlooks.
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Should Investors Consider These 3 Top-Ranked Defense Stocks?
Defense-related stocks have caught the attention of investors over the last year as geopolitical tensions around the world heat up. For example, the Zacks Aerospace sector has widely outperformed the S&P 500 since the beginning of 2022, as we can see in the chart below.
Image Source: Zacks Investment Research
And with countries increasing their defense budgets, these companies’ products and services will likely remain in high demand.
In addition, the Zacks Aerospace sector is currently ranked #1 out of all 16 Zacks sectors, indicating that companies within have witnessed positive earnings estimate revisions.
For those interested in tapping into the improved outlook, three top-ranked stocks – Northrop Grumman (NOC - Free Report) , Raytheon Technologies (RTX - Free Report) , and Curtiss-Wright (CW - Free Report) – could all be considerations.
Northrop Grumman
Northrop Grumman is a global aerospace and defense company that provides advanced technology solutions for a range of industries. Presently, the stock carries a Zacks Rank #2 (Buy), with earnings estimates inching higher.
Image Source: Zacks Investment Research
The company posted solid quarterly results in its latest release, exceeding the Zacks Consensus EPS Estimate by more than 13%. Quarterly revenue totaled $10.1 billion, 4% ahead of expectations and improving nicely from year-ago sales of $8.6 billion.
Image Source: Zacks Investment Research
And for the cherry on top, Northrop has shown a commitment to increasingly rewarding its shareholders, boasting a 9% five-year annualized dividend growth rate.
Currently, NOC’s dividend yields 1.5% annually.
Image Source: Zacks Investment Research
Raytheon Technologies
Raytheon Technologies provides advanced systems and services worldwide for commercial, military, and government customers. Like NOC, Raytheon sports a favorable Zacks Rank #2 (Buy).
RTX shares aren’t expensive by any stretch, with the current 19.8X forward earnings multiple nearly in line with the five-year median and well below the Zacks Aerospace sector average.
Image Source: Zacks Investment Research
The company’s cash-generating abilities recently saw a solid bump; Raytheon reported free cash flow of $3.7 billion in its latest release, improving 70% year-over-year.
Image Source: Zacks Investment Research
Curtiss-Wright
Curtiss-Wright specializes in producing a wide range of high-tech products and services for various industries, such as aerospace, defense, and industrial markets. The company’s earnings outlook has modestly drifted higher, helping land it into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
In addition, the company’s 16.5% trailing twelve-month return on equity (ROE) is well above the Zacks sector average, indicating a higher efficiency in generating profit from existing assets.
Image Source: Zacks Investment Research
Bottom Line
Investors have found interest in defense stocks following rising geopolitical tensions. And as long as countries continue increasing their defensive budget, these defense companies will continue to generate demand.
All three defense stocks above – Northrop Grumman (NOC - Free Report) , Raytheon Technologies (RTX - Free Report) , and Curtiss-Wright (CW - Free Report) – could be considerations for investors seeking exposure.
All three sport a favorable Zacks Rank, indicating optimistic near-term business outlooks.