Over 750k Masterworks members are all asking themselves that very question right now after this art investing platform achieved 100% positive net returns on 14 exits. Despite the catastrophic hit to its reputation that GM took with the 2008 U.S. auto industry bailout, the company has since gone on to great success. Today, GM is considered a reliable long-term pick with a future in electric vehicle development. CVS is a widespread pharmacy chain with over 9,900 locations in all 50 states plus Washington, D.C., and Puerto Rico. Despite competition from pharmacies in larger retail chains like Walmart, CVS has continued to grow and thrive, with the company’s resilience making it a fantastic defensive stock.
- General Dynamics’ Marine unit and Gulfstream business provide organic revenue growth in the near-term, and Epstein says its strong balance sheet will drive dividend and buyback growth in the longer-term.
- This means knowing the top and bottom line growth rate, its debt structure and any recent news or material events such as large contracts.
- Perhaps the most tangible near-term impact from the war in Israel is regarding interest rates.
- Truist Securities analyst Michael Ciarmoli has a Buy rating on the stock, citing improved profitability as the travel industry continues to recover in 2022.
- Compare price-earnings, price-book, debt-equity, price-sales and year-over-year (YOY) revenue and earnings per share growth.
These stocks also tend to make aircraft for airlines for commercial use. The paradigm for investing in defense stocks changed in a dramatic way when Russia invaded Ukraine, according to Bank of America analyst Ronald Epstein. Epstein is projecting at least $800 billion in U.S. what is forex trading defense spending in 2023, creating big opportunities for defense companies. Here are eight of the best defense stocks to buy now, according to Bank of America. The aerospace and defense company’s 737 MAX aircraft was grounded in March 2019 for 20 months due to two crashes.
Top Defense Stocks That Pay Growing Dividends
Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. Given the uncertainty, it could be a good idea for long term investors to own a well diversified portfolio of stocks across many different sectors. 46 hedge funds were long on the company’s stock at the end of the third quarter, according to Insider Monkey’s database. Yacktman Asset Management had the biggest long position in the company at the end of Q3 2022. Over the last two decades, Lockheed’s stock returned over 700%, good enough for second best among the five largest contractors. The defense giant has also embarked on an aggressive campaign to hike its dividend payment.
Procter & Gamble offers a broad range of products, with a wide range of brands under the company, including Gillette, Olay, Oral-B, Tide, Dawn, Bounty, Febreze, Pampers, Pantene and many more. These are all consumer essentials that are resilient to economic changes, making Procter & Gamble a good choice for a defensive stock. FedEx is synonymous with delivery in the U.S., although it also offers a wide range of business and e-commerce services.
Could This Be a Perfect Investment Strategy?
In the short-term, of course, the sector could still head lower, but it my belief that investors have ignored defense in their portfolio for too long. Although that was down from the prior year, it still represents a very respectable 22.7% of total sales. In other words, almost 23% of all Coca-Cola’s sales goes straight to the company’s net cash pile, before it spends money on dividends, buybacks and debt reduction. Pfizer (PFE, $40.18) is a diversified pharmaceutical company that offers medicines and vaccines in a broad spectrum of therapeutic areas.
What Are Defense Stocks?
It’s a similar story at Boeing, where CFO Brian West recently told investors about “new pressure” on its problematic fixed-price programs that previously caused multibillion-dollar charges for the company. Meanwhile, other legacy programs are taking longer to get back on track. As such, West expects Boeing’s defense, space, and security profit margin to be negative in the third quarter. The next largest fund is Invesco’s Aerospace and Defense ETF (PPA), which tracks the SPADE Defense Index and has a market cap weighted index over more than 50 companies. Northrup Grumman, RTX, Lockheed Martin and Boeing are the four largest holdings, all with a roughly 6% weight. Prefer to assess the dividend in terms of the company’s cash flow instead of its earnings?
To be fair, Lockheed Martin just announced that 2022 would be a relatively weak year, with sales dropping slightly from 2021 levels. This is an opportunity for long-term investors to get into one of the defense industry’s biggest names at a reasonable price, noting that the stock’s 3.2% dividend yield is near the higher end of its historical yield range. It’s price-to-sales ratio, price-to-earnings ratio, price-to-book value ratio, and price-to-cash flow ratio are all below their five-year averages, as well. L3Harris Technologies is an aerospace and defense company focused on technology-driven mission solutions. Epstein says supply chain disruptions have weighed on L3Harris revenues in recent quarters, but future growth in the F-35 fighter jet program and international demand will boost growth in 2023 and beyond. L3Harris management anticipates the company’s current inventory buildup will be drawn down starting in the second half of 2022.
A broad stock market drop due to a declining economy or rising interest rates could pull all securities lower in the short-term. As to what would derail the sector over a longer period, the key is political will and whether Congress would reduce what to expect from this review spending on defense and security in order to fund new social programs. While a minority in office favor doing just this, they are still just a small minority. Yet as US politics has revealed, sometimes a minority can direct the agenda and rule.
The lowdown on some of the top options for investors seeking exposure to the defense industry.
Its legacy fighter jets, like the F/A-18 and F-15, have updates in the works. Defense stocks surged following Russia’s invasion of Ukraine on Feb. 24, 2022. Investing in virtual currency has produced jaw-dropping returns for some, but the field still presents risks. It may be smart to consider investing in one of these artificial intelligence-oriented ETFs.
It might not be a hypersonic rate of growth, but it’s one that should continue to put its stock into orbit. The contractor nabbed over $28.1 billion in government contracts in 2020, putting it ahead of General Dynamics ($25.6 billion) and Boeing ($23 billion). Its stock did better than a 650% return over the last 20 years, though things get skewed in 2020 because of its merger with United Technologies and the subsequent spinoff of both Carrier and Otis. The Pittsburgh-based company supplies the Lockheed-made, fifth-generation F-35 stealth fighter jets.
Its powerful free cash flow is more than sufficient to cover dividends, share repurchases, acquisitions and debt reduction. Last year the company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a cash flow measure, grew 6.6%. Although its reported earnings per share (EPS) fell to 82 cents from 89 cents, Wendy’s management now forecasts that in 2023 EPS will rise to between 95 cents and $1.00. Investors are concerned about the financial sector and the economy, but these best defensive stocks have risk-averse traits that can help calm those fears. The ARK Space Exploration & Innovation ETF (ARKX -0.33%) is an aerospace-focused actively managed fund run by Cathie Wood’s Ark Invest. As with most of Ark’s portfolio, this ETF is focused primarily on growth.
We’d like to share more about how we work and what drives our day-to-day business. In addition, Coca-Cola says it is gaining market share in the nonalcoholic ready-to-drink (“NARTD”) beverages segments. However, going forward, Pfizer projects lower revenue, as the COVID-19 vaccine revenue windfall eases back in 2023. Nevertheless, it still projects non-COVID revenue will be up 7% to 9% in 2023. Wendy’s (WEN, $20.77) is the second largest hamburger quick service restaurant (QSR) chain in the U.S. and the third largest globally.
Latest Defense Stocks Dividends
Please appreciate that there may be other options available to you than the products, providers or services covered by our service. Before joining Finder in 2021, Matt covered everything from finance news what is tenkofx and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on CBS, MSN, Best Company and Consolidated Credit, among others.
Meanwhile, the pandemic hit the airline industry, affecting both its narrow and wide-body aircraft orders. More recently, shares of the Dow Jones stock have been hit by broad-market headwinds. The stock’s yield is currently around 2.3%, which is toward the high side historically but not quite as compelling as what Lockheed Martin is offering. Its valuation metrics are mixed as well, with price-to-sales roughly in line with its five-year average and price-to-earnings above that longer-term figure. Price-to-cash flow and price-to-book value are both below their five-year averages. It’s probably best to consider General Dynamics as fairly priced, but that’s not a bad thing if you are looking for a long-term defense stock with a bit of diversification outside of the sector.