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Howmet vs. RTX: Which Aerospace & Defense Stock is the Better Pick Now?
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Key Takeaways
Howmet posted double-digit growth in commercial and defense aerospace revenues in 2025.
RTX generated 11% organic growth, supported by strong aftermarket demand and OEM volumes.
HWM returned $881M to shareholders in 2025, while RTX ended the year with a $268B backlog.
Howmet Aerospace Inc. (HWM - Free Report) and RTX Corporation (RTX - Free Report) are two well-known names operating in the aerospace and defense industry. Howmet is engaged in providing highly engineered solutions for customers across the transportation and aerospace industries. RTX supplies advanced systems and services for commercial, military and government customers worldwide.
Both companies are benefiting from strong growth prospects in the aerospace and defense sector, driven by recovering air traffic and expansionary U.S. budget policies in recent years. But which stock offers the better investment opportunity today? Let’s examine their fundamentals, growth outlook and key challenges to arrive at a well-informed decision.
The Case for Howmet
Howmet is benefiting from solid momentum in its commercial aerospace market. With growing passenger traffic in the global aviation market, wide-body aircraft demand has picked up, leading to an increase in OEM spending. This has consistently improved demand for the aircraft parts and products that the company provides.
Revenues from the commercial aerospace market increased 13% year over year in the fourth quarter of 2025, which constituted 53% of its business. Also, in the first, second and third quarters, revenues from the market increased 9%, 8% and 15% year over year, respectively. The sustained strength was attributed to increasing demand for engine spares and a record backlog for new, more fuel-efficient aircraft with reduced carbon emissions.
The expanding defense budget also remains a key growth catalyst for HWM. In the fourth quarter of 2025, revenues from the defense aerospace market rose 20% year over year, which accounted for 17% of the company’s total sales. Also, in the first, second and third quarters, revenues from this market increased 19%, 21% and 24% year over year, respectively. This growth in revenues was driven by strong demand for engine spares, especially for the F-35 program, as well as new builds and spare parts for legacy fighter jets. With military aircraft programs expected to benefit from increased funding, HWM is poised to continue benefiting from consistent demand in the quarters ahead.
Howmet’s measures to reward shareholders are encouraging. In 2025, the company paid dividends of $181 million and repurchased shares worth $700 million. In August 2025, the company hiked its dividend by 20% to 12 cents per share (annually: 48 cents), marking its second dividend hike in 2025.
The company’s shareholder-friendly policies are supported by its healthy liquidity position. Exiting the fourth quarter, Howmet’s cash equivalents were $742 million, much higher than its short-term maturities and other current liabilities of $312 million. In 2025, it generated net cash of $1.88 billion from operating activities, while its free cash flow totaled $1.4 billion.
However, persistent weakness in the commercial transportation market is concerning for the company. In 2025, revenues from the commercial transportation market declined 5% on a year-over-year basis. Although recovering, lower commercial truck builds, given tariff-related and economic uncertainty in North America, have been impacting the company’s near-term performance. Demand in the commercial transportation markets served by the Forged Wheels segment is expected to remain soft till the first half of the year due to lower OEM builds.
The Case for RTX
A sustained rebound in global commercial air travel continues to act as a key growth driver for RTX, supported by strong momentum in both commercial OEM and aftermarket businesses. The company recently delivered 11% organic year-over-year sales growth, led by double-digit expansion across these segments. Collins Aerospace posted a 3% increase in sales, supported by a robust 13% rise in commercial aftermarket demand. Also, Pratt & Whitney reported 25% revenue growth, supported by a 21% jump in aftermarket sales and a 28% surge in OEM volumes.
Higher production volumes and a favorable product mix, particularly across large commercial engines and Pratt Canada operations, are expected to further reinforce RTX’s growth trajectory in the commercial aerospace market. Notably, the company ended 2025 with a strong commercial backlog of $161 billion, reflecting solid demand visibility. In the quarters ahead, RTX’s management remains optimistic about continued recovery in commercial aerospace, which is likely to support near-term operating performance.
Aided by the wide range of combat-proven defense products, RTX continues to receive ample orders from the Pentagon and its foreign allies. Keeping up with its usual track record, the company won several notable defense awards during the fourth quarter of 2025, which resulted in solid bookings of $10.3 billion and a record backlog of $268 billion. Among the most significant awards is a $1.7 billion contract to deliver four Patriot air and missile defense systems to Spain. The company also landed a $1.2 billion deal for the production of Tamir missiles.
As of Dec. 31, 2025, RTX’s cash and cash equivalents totaled $7.44 billion. Its long-term debt of $34.29 billion as of Dec. 31, 2025, remained well above the cash balance. However, the current debt value of $3.62 billion remained well below the company’s cash reserve. This reflects a solid solvency position for the stock, at least over the short term.
The Zacks Consensus Estimate for HWM & RTX
The Zacks Consensus Estimate for HWM’s 2026 sales and earnings per share (EPS) implies year-over-year growth of 11.6% and 20.7%, respectively. HWM’s EPS estimates for 2026 have increased over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for RTX’s 2026 sales and EPS indicates year-over-year growth of 5.4% and 8.3%, respectively. RTX’s EPS estimates have been trending northward over the past 60 days for 2026.
Image Source: Zacks Investment Research
Price Performance and Valuation
In the past year, Howmet shares have soared 78.5%, while RTX stock has gained 44.5%.
Image Source: Zacks Investment Research
HWM is trading at a forward 12-month price-to-earnings ratio of 50.26X, above its median of 26.07X over the last five years. RTX’s forward earnings multiple sits at 27.84X, above its median of 19.06X over the same time frame.
Image Source: Zacks Investment Research
Final Take
Howmet is experiencing strong growth in its commercial and defense aerospace segments, driven by rising air travel, robust demand for engine spares and increased defense spending, supported by a solid backlog and consistent revenue growth. The company also maintains strong cash flows and shareholder returns, though weakness in the commercial transportation market and lower truck builds remain near-term challenges.
On the other hand, RTX continues to see strong momentum from the recovery in global air travel, driving double-digit growth in its commercial OEM and aftermarket segments, supported by rising demand, higher production volumes and a sizable backlog that provides solid revenue visibility. The company is also benefiting from steady defense orders, resulting in strong bookings and a record backlog, while its healthy cash reserves ensure short-term financial stability despite a relatively high long-term debt position.
Given these factors, RTX seems a better pick for investors than HWM currently. While Howmet currently has a Zacks Rank #3 (Hold), RTX carries a Zacks Rank #2 (Buy).
View the Zacks #1 Rank List
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Howmet vs. RTX: Which Aerospace & Defense Stock is the Better Pick Now?
Key Takeaways
Howmet Aerospace Inc. (HWM - Free Report) and RTX Corporation (RTX - Free Report) are two well-known names operating in the aerospace and defense industry. Howmet is engaged in providing highly engineered solutions for customers across the transportation and aerospace industries. RTX supplies advanced systems and services for commercial, military and government customers worldwide.
Both companies are benefiting from strong growth prospects in the aerospace and defense sector, driven by recovering air traffic and expansionary U.S. budget policies in recent years. But which stock offers the better investment opportunity today? Let’s examine their fundamentals, growth outlook and key challenges to arrive at a well-informed decision.
The Case for Howmet
Howmet is benefiting from solid momentum in its commercial aerospace market. With growing passenger traffic in the global aviation market, wide-body aircraft demand has picked up, leading to an increase in OEM spending. This has consistently improved demand for the aircraft parts and products that the company provides.
Revenues from the commercial aerospace market increased 13% year over year in the fourth quarter of 2025, which constituted 53% of its business. Also, in the first, second and third quarters, revenues from the market increased 9%, 8% and 15% year over year, respectively. The sustained strength was attributed to increasing demand for engine spares and a record backlog for new, more fuel-efficient aircraft with reduced carbon emissions.
The expanding defense budget also remains a key growth catalyst for HWM. In the fourth quarter of 2025, revenues from the defense aerospace market rose 20% year over year, which accounted for 17% of the company’s total sales. Also, in the first, second and third quarters, revenues from this market increased 19%, 21% and 24% year over year, respectively. This growth in revenues was driven by strong demand for engine spares, especially for the F-35 program, as well as new builds and spare parts for legacy fighter jets. With military aircraft programs expected to benefit from increased funding, HWM is poised to continue benefiting from consistent demand in the quarters ahead.
Howmet’s measures to reward shareholders are encouraging. In 2025, the company paid dividends of $181 million and repurchased shares worth $700 million. In August 2025, the company hiked its dividend by 20% to 12 cents per share (annually: 48 cents), marking its second dividend hike in 2025.
The company’s shareholder-friendly policies are supported by its healthy liquidity position. Exiting the fourth quarter, Howmet’s cash equivalents were $742 million, much higher than its short-term maturities and other current liabilities of $312 million. In 2025, it generated net cash of $1.88 billion from operating activities, while its free cash flow totaled $1.4 billion.
However, persistent weakness in the commercial transportation market is concerning for the company. In 2025, revenues from the commercial transportation market declined 5% on a year-over-year basis. Although recovering, lower commercial truck builds, given tariff-related and economic uncertainty in North America, have been impacting the company’s near-term performance. Demand in the commercial transportation markets served by the Forged Wheels segment is expected to remain soft till the first half of the year due to lower OEM builds.
The Case for RTX
A sustained rebound in global commercial air travel continues to act as a key growth driver for RTX, supported by strong momentum in both commercial OEM and aftermarket businesses. The company recently delivered 11% organic year-over-year sales growth, led by double-digit expansion across these segments. Collins Aerospace posted a 3% increase in sales, supported by a robust 13% rise in commercial aftermarket demand. Also, Pratt & Whitney reported 25% revenue growth, supported by a 21% jump in aftermarket sales and a 28% surge in OEM volumes.
Higher production volumes and a favorable product mix, particularly across large commercial engines and Pratt Canada operations, are expected to further reinforce RTX’s growth trajectory in the commercial aerospace market. Notably, the company ended 2025 with a strong commercial backlog of $161 billion, reflecting solid demand visibility. In the quarters ahead, RTX’s management remains optimistic about continued recovery in commercial aerospace, which is likely to support near-term operating performance.
Aided by the wide range of combat-proven defense products, RTX continues to receive ample orders from the Pentagon and its foreign allies. Keeping up with its usual track record, the company won several notable defense awards during the fourth quarter of 2025, which resulted in solid bookings of $10.3 billion and a record backlog of $268 billion. Among the most significant awards is a $1.7 billion contract to deliver four Patriot air and missile defense systems to Spain. The company also landed a $1.2 billion deal for the production of Tamir missiles.
As of Dec. 31, 2025, RTX’s cash and cash equivalents totaled $7.44 billion. Its long-term debt of $34.29 billion as of Dec. 31, 2025, remained well above the cash balance. However, the current debt value of $3.62 billion remained well below the company’s cash reserve. This reflects a solid solvency position for the stock, at least over the short term.
The Zacks Consensus Estimate for HWM & RTX
The Zacks Consensus Estimate for HWM’s 2026 sales and earnings per share (EPS) implies year-over-year growth of 11.6% and 20.7%, respectively. HWM’s EPS estimates for 2026 have increased over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for RTX’s 2026 sales and EPS indicates year-over-year growth of 5.4% and 8.3%, respectively. RTX’s EPS estimates have been trending northward over the past 60 days for 2026.
Image Source: Zacks Investment Research
Price Performance and Valuation
In the past year, Howmet shares have soared 78.5%, while RTX stock has gained 44.5%.
Image Source: Zacks Investment Research
HWM is trading at a forward 12-month price-to-earnings ratio of 50.26X, above its median of 26.07X over the last five years. RTX’s forward earnings multiple sits at 27.84X, above its median of 19.06X over the same time frame.
Image Source: Zacks Investment Research
Final Take
Howmet is experiencing strong growth in its commercial and defense aerospace segments, driven by rising air travel, robust demand for engine spares and increased defense spending, supported by a solid backlog and consistent revenue growth. The company also maintains strong cash flows and shareholder returns, though weakness in the commercial transportation market and lower truck builds remain near-term challenges.
On the other hand, RTX continues to see strong momentum from the recovery in global air travel, driving double-digit growth in its commercial OEM and aftermarket segments, supported by rising demand, higher production volumes and a sizable backlog that provides solid revenue visibility. The company is also benefiting from steady defense orders, resulting in strong bookings and a record backlog, while its healthy cash reserves ensure short-term financial stability despite a relatively high long-term debt position.
Given these factors, RTX seems a better pick for investors than HWM currently. While Howmet currently has a Zacks Rank #3 (Hold), RTX carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.