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Military Stocks To Buy Now



The paradigm for investing in defense stocks changed in a dramatic way when Russia invaded Ukraine in February 2022. U.S. President Joe Biden's recently proposed fiscal 2024 Department of Defense budget calls for $842 billion in discretionary DoD spending, up 3.2% from 2023 levels. Bank of America analyst Ronald Epstein expects DoD discretionary spending will surpass the $1 trillion mark by fiscal 2026, creating big opportunities for defense companies.




military stocks to buy now



Northrop Grumman is one of the world's largest weapons and military technology producers. Epstein says Northrop is a key DoD contractor in next-generation aircraft and space defense. Epstein says investors shouldn't be concerned about Northrop's weaker fourth-quarter margins and soft initial 2023 free cash flow guidance. He says the margin pressures are largely attributable to the wind-down of high-margin legacy programs like Global Hawk, E-2 and JSTARS. Epstein says Northrop's terminal growth rate could exceed the historical growth rate of U.S. defense spending. Bank of America has a "buy" rating and $655 price target for NOC stock, which closed at $449.98 on March 21.


General Dynamics produces a range of vehicles and systems for the U.S. military. In February, Epstein raised his forecast for 2024 Gulfstream deliveries to 170 aircraft, including 138 large aircraft and 32 midsize planes. He projects 4.9% revenue growth in 2023, including first-quarter Marine segment sales of $2.5 billion and Technology segment sales of $3.1 billion. Epstein is bullish on General Dynamics' exposure to defense spending related to land and sea priorities, as well as the commercial aerospace market recovery. Bank of America has a "buy" rating and $305 price target for GD stock, which closed at $222.37 on March 21.


BA stock earns an IBD Composite Rating of 67, EPS Rating of 25 and RS Rating of 91, all out of a best-possible 99. A 91 RS Rating means that Boeing has outperformed 91% of all stocks in IBD's database over the past year.


Based in Stamford, Conn.-based, Hexcel supplies adhesives and composites for more than 100 military aircraft and space programs. Those include the Lockheed Martin F-35, the Boeing Hornet and the Eurofighter Typhoon.


In space applications, advanced composites are used for rocket booster cases and payload doors for launch vehicles, the company says. They are also used in solar arrays for military and commercial satellites.


Russia's invasion of Ukraine has, among other things, unsettled much of the stock market. However, one corner of the market has experienced a lift as a result, and stands to keep benefiting should this conflict continue or other geopolitical risks rise: defense stocks.


In addition to these catalysts, defense stocks might be even more compelling in the face of a possible economic slowdown as the Federal Reserve kicks off its first rate-hiking cycle in years. Unlike other areas of the market, the defense industry has a steady and reliable revenue source in the U.S. government.


The company manages U.S. military bases and facilities around the world, providing supply chain and logistics, information technology support, engineering, security and other services. In mid-2021, it built a 250,000-square-foot facility (Freedom Village) in 45 days to house thousands of Afghan refugees.


The vast majority of Wall Street analysts agree that the blue chip is one of the best defense stocks out there. Of the 23 pros following the name that are tracked by S&P Global Market Intelligence, 12 say it's a Strong Buy and five call it a Buy. This compares to four that have it at Hold and two that believe it's a Strong Sell.


Raytheon Technologies (RTX (opens in new tab), $101.08) is one of the largest defense stocks in the world. The company's suite of products include aircraft engines, guided missiles, satellites, drones, land warfare systems, torpedoes, air traffic control systems, radars and many others.


AAR Corp. (AIR (opens in new tab), $48.21) is the first of two Strong Buy-rated defense stocks on this list. AIR is the largest independent provider of aircraft maintenance, repair and overhaul services in North America, serving both commercial and government clients. The company's goal is to help reduce aircraft operating costs and enhance flight safety. AAR also makes mobile tactical shelter systems used in military and other missions.


The company's recent acquisition of Magnetic Seal gives DCO an aerostructures supplier with a "leading market position within a specialized niche," says B. Riley Securities analyst Mike Crawford, who has a Buy rating on the stock. MagSeal sells solutions to more than 50 commercial and military aircraft programs.


The U.S. government spends far more on defense than any other country, awarding contracts worth hundreds of millions of dollars to American companies that manufacture military technology and equipment.


Lockheed Martin is one of the top aerospace companies in the world and has a long history of collaborating with the U.S. government to provide military equipment. It has developed many different types of military equipment, including aircraft, missiles, cybersecurity tools, and space systems.


Raytheon is another company with a long history of government collaboration. Like Lockheed, Raytheon provides a variety of aerospace and other defense products to the U.S. military and government. Raytheon also has commercial customers such as passenger airlines.


Defense stocks are typically less volatile than other businesses due to the relative stability of government spending. Given the uncertainty about the economy's future, investors will likely find that stability appealing.


Defense stocks are a popular choice among investors looking for long-term returns. The defense industry is one of the most consistent sectors in the stock market. As a result, many investors see it as a safe bet for their portfolios. For the uninitiated, defense stocks refer to companies that focus on providing products and services related to national security or military operations.


One of the main reasons why investors choose to invest in defense stocks is that they tend to be relatively stable when compared to other industries. This is because governments around the world typically have a consistent demand for defense products and services regardless of economic conditions. This means that revenues from these companies are generally more reliable than those from other sectors, making them ideal for long-term investments. Furthermore, many defense companies also have large dividend yields which can help boost returns over time. With this in mind, here are two defense stocks to watch in the stock market today.


Following the terribly disruptive invasion of Ukraine by Russian military forces, the subsequent resistance effort has been both extraordinary and inspiring. Unfortunately, it also means that the conflict will likely drag on, translating to upside potential for two defense stocks, RTX and AVAV.


In an action that the world community neither needed nor desired, Russia nevertheless made the dangerously unsettling decision to invade neighboring Ukraine earlier this year. In doing so, the terrifying action solidified Ukrainian resolve and identity, leading to a remarkable fight for independence. Sadly, the Kremlin broadcasted no intention of backing down, thus cynically bolstering two defense stocks to buy in particular, RTX and AVAV.


One of the lesser-known defense stocks to buy outside of sector experts, AeroVironment widely drew acclaim for helping Ukrainian forces get out of purely defensive postures and begin launching counteroffensives. AeroVironment specializes in unmanned aerial vehicles (UAVs), particularly its Switchblade drone.


Some of the assistance provided has been new and purchased on contract from defense industry manufacturers as a part of the Ukraine Security Assistance Initiative. But much of the equipment, some $12.5 billion worth, has been provided as part of presidential drawdown authority. That means things such as Javelin and Stinger missiles, HIMARS rocket launcher systems, and Switchblade unmanned aerial systems, for instance, have been pulled directly from existing U.S. military inventory to be sent overseas.


Because so much gear has been pulled from U.S. military units, that equipment must now be replaced in order to sustain America's own readiness, and the Defense Department has already contracted with an array of manufacturers to give back to military units what was taken from them in order to support Ukraine.


Already, about $1.2 billion in contracts are underway to replenish U.S. military stocks for weapons sent to Ukraine, LaPlante said. That includes about $352 million in funding for replacement Javelin missiles, $624 million for replacement Stinger missiles, and $33 million for replacement HIMARS systems.


Missile Launch A U.S. Army paratrooper fires an FGM-148 Javelin shoulder-fired, anti-tank missile during a combined arms live-fire exercise at Grafenwoehr Training Area, Germany, August 21, 2019. Javelin missiles have been pulled from U.S. military inventory to be sent to Ukraine. Now, the Defense Department is contracting to backfill those weapons. Share: Share Copy Link Email Facebook Twitter LinkedIn WhatsApp var addthis_config = data_use_flash: false, data_use_cookies: false, ui_508_compliant: true, Download: Full Size (921.6 KB) Photo By: Army Sgt. Henry Villarama VIRIN: 190821-A-AR102-001D 041b061a72


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