Saturday, July 19, 2014

Top Defense and Aerospace Stocks

With the crash of the plane in Ukraine and the fighting going on in Gaza and Israel, investors are concerned about the possibility of an escalating war. The stock market dropped on Thursday but recovered on Friday. The VIX (VXX) which measures volatility, spiked 6% on Thursday.

Some of the defense and aerospace stocks have been moving during the last week, such as Northrop Grumman Corp. (NOC) which is up over 17% during the last week versus the Dow Jones Industrial Average, which was up less than 1%. Raytheon (RTN) was up 2% during the last week. According to the list of defense and aerospace stocks at, there are a dozen companies, with half paying dividends.

Northrop Grumman is a provider of aerospace products, electronics, and shipbuilding to the military, government, and commercial customers. The stock trades at 14 times trailing earnings, and 13 times forward earnings.  The stock sports a yield of 2.3%. Earnings were up 18.4% for the latest reported quarter, on a 4.2% drop in revenues.

Raytheon has six divisions: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services. The stock has a price to earnings ratio of 15, a forward PE of 12, and pays a yield of 2.5%. Quarterly earnings were up 22% on a 6% reduction in revenues.

Lockheed Martin Corporation (LMT) manufactures military aircraft, and air vehicles, including the F-35 Joint Strike Fighter, the F-22 air dominance attack aircraft, and the F-16 multi-role fighter. The stock has a PE of 16, a forward PE of 14, and pays a yield of 3.2%. Earnings were up 22.6% for the latest quarter.

For a list of a dozen defense and aerospace stocks which has the symbol, PE, forward PE, yield, and country, go to

Disclosure: Author did not own any of the above at the time the article was written.


No comments: