Defense Stocks to Buy: 4 Candidates to Consider for 2023

Introduction

The global defense industry is projected to reach $2.4 trillion by 2027, driven by rising geopolitical tensions, increased military spending, and technological advancements. Defense stocks offer investors potential stability and growth in uncertain market conditions. Here are four compelling defense stocks to consider for 2023:

1. Lockheed Martin (LMT)

Market Cap: $120.4 billion
Dividend Yield: 2.48%

Lockheed Martin is a leading global aerospace and defense company. It is a key contractor for the U.S. Department of Defense and is involved in a wide range of defense programs, including the F-35 fighter jet, the Aegis combat system, and the THAAD missile defense system. In 2022, Lockheed Martin reported revenue of $69.6 billion, a 6% increase year-over-year. The company expects continued growth in 2023, driven by increased demand for its products and services.

Tip: Lockheed Martin's focus on innovation and technology makes it a long-term growth stock for defense investors.

2. Northrop Grumman (NOC)

Market Cap: $88.5 billion
Dividend Yield: 2.19%

Northrop Grumman is another major defense contractor with a broad portfolio of products and services. The company is involved in shipbuilding, aerospace, cybersecurity, and space systems. In 2022, Northrop Grumman reported revenue of $39.8 billion, a 2% increase year-over-year. The company expects continued growth in 2023, driven by increased demand for its mission systems and technologies.

Trick: Northrop Grumman's strong backlog and long-term contracts provide investors with stability.

3. General Dynamics (GD)

Market Cap: $61.2 billion
Dividend Yield: 2.05%

General Dynamics is a diversified defense company with a focus on land combat systems, naval warfare, and aerospace. The company is also involved in information technology and cybersecurity. In 2022, General Dynamics reported revenue of $39.4 billion, a 4% increase year-over-year. The company expects continued growth in 2023, driven by increased demand for its land systems and shipbuilding products.

Tip: General Dynamics' diverse portfolio and strong execution make it a well-rounded option for defense investors.

4. Raytheon Technologies (RTX)

Market Cap: $146.5 billion
Dividend Yield: 2.46%

Raytheon Technologies is a global aerospace and defense technology company. The company is involved in a wide range of defense programs, including air and missile defense, radar systems, and cybersecurity. In 2022, Raytheon Technologies reported revenue of $64.3 billion, a 3% increase year-over-year. The company expects continued growth in 2023, driven by increased demand for its defense systems and technologies.

Trick: Raytheon Technologies' strong position in the air and missile defense market makes it a good investment for those seeking exposure to this growing segment.

Table 1: Defense Stock Performance

Table 2: Defense Stock Financials

Table 3: Defense Stock Valuations

Table 4: Defense Stock Analyst Ratings

Conclusion

Defense stocks can provide investors with stability and growth in uncertain times. Lockheed Martin, Northrop Grumman, General Dynamics, and Raytheon Technologies are four compelling defense stocks to consider for 2023. These companies have strong businesses, a growing backlog of orders, and the potential to generate substantial returns for shareholders.