![]() ![]() But that's still enough to place the company among the largest defense contractors.Īs one might expect, much of Boeing's defense portfolio is aviation-based. Boeingīoeing is best known for its commercial jet empire, and defense makes up less than one-third of total sales. It is also the parent of Gulfstream, one of the world's largest makers of business jets.ĭate source: Yahoo! Finance. General Dynamics defense is focused on warships, tanks and information technology. fleet of bombers, and it also has a key role in a number of space programs and makes components for warplanes made by others. The world's largest pure-play defense contractor, Lockheed Martin specializes in warplanes, helicopters, missiles, electronics, and space. The product of a 2020 merger between Raytheon and United Technologies, RTX makes a number of missile systems and defense electronics systems, in addition to a broad range of commercial aircraft components. Here's a look at some of the biggest names in defense:īest known as a maker of commercial airplanes, Boeing also has a large defense business focused on planes and drones and one of the leading space franchises. The key to investing in the sector is to choose carefully between the contractors based on areas of Pentagon emphasis and relative valuation gaps between the companies that can be explained away or should ease over time. But none is a jack of all trades able to compete for whatever the Pentagon desires. Most have at least two areas of emphasis, such as warplanes and missiles or ships and tanks, so they are not overly reliant on any one contract. There are a few specialists, but following a period of intense consolidation during the 1990s, most of the large contractors have numerous different businesses. Broadly speaking, any company that receives the bulk of its revenue from government customers, whether it's the Pentagon, civil agencies, or intelligence services, is considered a defense contractor. It's important to understand a few basics about the defense industry. Thanks to the extended time frame of government contracting, they can offer revenue predictability well into the future. They can offer a mix of slow but steady growth and income to a portfolio. They tend to move based on what is going on in Washington, D.C., rather than on the cyclical movement of the economy. S&P 500 data by YCharts.ĭefense stocks tend not to be highfliers like tech stocks, but they do offer predictable and stable returns. ![]()
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