Defense stock companies began sparking investors interest in 2022, amid Russia’s invasion of Ukraine.
In a world of changing economic paradigms and political instability, it is no surprise that investors are looking for additional protection for their investment portfolios.
However, there are many different opinions on the best portfolio protection strategies. This can include adding defense stocks, gold stocks, recession proof stocks, and ETFs.
With speculation of China’s war in Taiwan and potential retaliation from the United States, now is a great time to consider investing in defense stock companies.
Below, we will present the 5 Best Defense Stock Companies to buy now in 2023!
Best Defense Stock Companies for 2023
1. Lockheed Martin (NYSE: LMT)
- Ticker: LMT
- Dividend Yield: 2.42%
- 10-Yr Dividend Growth Rate: 12.60%
- Payout Frequency: Quarterly
- Payout Ratio: 52.63%
- Market Cap: $124.90 Billion
Lockheed Martin is an American Aerospace, arms, defense and information security company headquartered in the United States.
It primarily operates in the United States and has operations worldwide. The Department of Defense is one of its largest contractors, with funds paid out directly by the Pentagon. Its key products include aircraft, integrated air and missile defense, space training and logistics.
Lockheed Martin employs more than 116,000 people and has approximately $20.99 billion in total assets.
In 2022, the company had annual revenues of $65.98 Billion.
With a dividend yield of 2.42% and a low payout ratio of 52.63%, Lockheed Martin is one of the best defense stock companies to buy for the long term.
2. Raytheon Technologies (NYSE: RTX)
- Ticker: RTX
- Dividend Yield: 2.21%
- 10-Yr Dividend Growth Rate: 5.4%
- Payout Frequency: Quarterly
- Payout Ratio: 61.54%
- Market Cap: $146.73 Billion
Raytheon Technologies is a multinational aerospace and defense company headquartered in the United States.
The company primarily manufacturers aircraft engines, drones, guided missiles, satellites and air defense systems. It is the largest publicly traded defense company by market capitalization.
Raytheon employs more than 182,000 people and has approximately $158.86 billion in total assets.
In 2022, the company had annual revenues of $67.07 Billion.
With a dividend yield of 2.21% and strong free cash flow metrics, Raytheon is a great bet on defense stocks when political instability rises.
3. General Dynamics (NYSE: GD)
- Ticker: GD
- Dividend Yield: 2.31%
- 10-Yr Dividend Growth Rate: 10.22%
- Payout Frequency: Quarterly
- Payout Ratio: 31.01%
- Market Cap: $63.00 Billion
General Dynamics is an aerospace, shipbuilding and defense company headquartered in the United States.
It is the fifth largest defense contractor in the world by revenue (Defense News, 2022). Some of its subsidiaries include; Bath Iron Works, Electric Boat, General Dynamics Mission Systems, General Dynamics Land Systems and Gulfstream.
General Dynamics employs more than 106,000 people and has approximately $51.58 billion in total assets.
In 2022, the company had annual revenues of $39.40 Billion.
With a dividend yield of 2.31% and double digit dividend growth, General Dynamics is among the best defense stock companies to buy in 2023.
4. Northrop Grumman Corporation (NYSE: NOC)
- Ticker: NOC
- Dividend Yield: 1.45%
- 10-Yr Dividend Growth Rate: 13.77%
- Payout Frequency: Quarterly
- Payout Ratio: 21.48%
- Market Cap: $71.85 Billion
Northrop Grumman Corporation is a multinational aerospace and defense company headquartered in Virginia, United States.
It is one of the largest weapons manufacturers in the world. They build critical military systems, aerospace technology and aircraft infrastructure and intelligence.
Northrop Grumman employs more than 95,000 people and has approximately $43.75 billion in total assets.
In 2022, the company had annual revenues of $36.60 Billion.
With a dividend yield of 1.45%, Northrop Grumman leaves room for strong dividend growth and shareholder returns for patient investors.
5. Heico Corporation (NYSE: HEI)
- Ticker: HEI
- Dividend Yield: 0.12%
- 10-Yr Dividend Growth Rate: N/A
- Payout Frequency: Quarterly
- Payout Ratio: 7.34%
- Market Cap: $20.31 Billion
Heico Corporation is an aerospace, defense and electronics company headquartered in Florida, United States.
It manufacturers important infrastructure for spacecraft, aircraft, and defense equipment. Their products can be found in commercial aircrafts, military aircrafts, rockets, sateilities, targeting systems and missiles.
Heico employs more than 6,500 people and has approximately $4.09 billion in total assets.
In 2022, the company had annual revenues of $2.20 Billion.
Heico Corporation is a relatively small defense stock compared to its peers. However, its high margins make it an attractive alternative. With a low payout ratio of 7.34%, Heico has great long term potential for high dividend growth and outsized shareholder returns.
Can You Invest In Defense Stock Companies ETFs?
So you might be curious, is there a safer way to invest into defense stock companies ETFs?
Well the answer is yes. If you’re less comfortable investing into individual defense stock companies, then you can invest defense stock ETFs.
Below we will present three defense stock companies ETFs to consider!
- iShares U.S. Aerospace & Defense ETF (ITA)
- SPDR S&P Aerospace & Defense ETF (XAR)
- Invesco Aerospace & Defense ETF (PPA)
Defense Stock Companies: Should You Invest Now in 2023?
Investing in defense stocks is not too common for individual investors. Unless you’re an asset manager, retail investors are more likely to focus on sectors like technology, energy, financials, and consumer discretionary.
However, defense stocks which often fall under the industrial sector could be a great portfolio diversifier.
Defense stocks can add layers of protection, as their growth is largely funded by government contracts. Their strong dividend growth track record and shareholder returns makes it an attractive sector to invest in for 2023 and beyond.
Disclosure: The author holds no position mentioned in this article. Freedom Stocks has a disclosure policy.
