The defense sector comprises companies that provide military and national security-related products and services. These firms develop and manufacture weapons, aircraft, vehicles, and technology for defense purposes. Defense stocks represent shares in these companies that are publicly traded on stock exchanges. The sector’s performance often correlates with global geopolitical events and government defense spending.
Investing in defense stocks can offer several potential benefits. These companies often have long-term government contracts, providing stable revenue streams. Defense spending tends to remain consistent regardless of economic conditions. Many defense firms pay dividends, appealing to income-focused investors. However, there are also risks to consider. The sector is heavily influenced by government policies and budgets. Changes in administration or priorities can impact defense spending. Ethical concerns may deter some investors from this sector.
When evaluating defense stocks, investors should consider factors beyond financial performance. Look at the company’s contract backlog and relationships with government agencies. Assess the firm’s ability to innovate and adapt to changing defense needs. Be aware of global political situations that might affect defense spending. Remember that the defense sector can be complex and subject to unique regulatory considerations. Considering this, here are two defense stocks to watch in the stock market today.
Defense Stocks To Invest In [Or Avoid] Now
- Lockheed Martin (NYSE: LMT)
- Boeing Co. (NYSE: BA)
Lockheed Martin (LMT Stock)
Leading off, Lockheed Martin (LMT) is a global aerospace, defense, security, and advanced technology company. They design and manufacture a wide range of products including aircraft, missiles, and space systems. Lockheed Martin is popular for projects like the F-35 fighter jet and various satellite systems.
Last month, Lockheed Martin reported a beat for its second quarter of 2024 financial results. Diving in, the company notched in earnings of $7.11 per share versus estimates of $6.45 per share. Additionally, revenue for the quarter came in at $18.12 billion compared to estimates of $17.06 billion. Moreover, the company also said it estimates 2024 earnings between $26.10 to $26.60 per share, on revenue of $70.50 billion to $71.50 billion.
Year-to-date, shares of LMT stock have increased by 19.34% so far. Meanwhile, during Thursday’s late morning trading session, Lockheed Martin stock is trading green on the day up 0.48%, currently trading at $544.52 a share.
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Boeing (BA Stock)
Second, Boeing Co. (BA) is a multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, and satellites. They serve both commercial and military markets worldwide. Boeing is one of the largest global aerospace manufacturers and a leading defense contractor.
Just this week, Boeing announced its most recent second-quarter 2024 financial results. Diving right in, the company reported a loss of $2.90 per share, with revenue of $16.87 billion for Q2 2024. This was versus earnings estimates which were a loss of $1.79 per share, and revenue expectations of $17.53 billion.
In 2024 thus far, shares of BA stock have fallen by 28.50% year-to-date. On top of that, during Thursday’s late morning trading session, Boeing stock is trading down on the day by 5.63% at $179.86 per share. With all this being said, is now potentially a good time to watch Boeing stock at these current levels?
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