3 Defense Stocks to Buy to Secure Your Portfolio

Stocks to buy

Although the concept of defense stocks to buy generates controversy for its dark cynicism, investors must remember one harsh reality: conflict is inevitable.

While I understand that much progress has been made in terms of social awareness and the commendable push for broader equity, such efforts are almost sure to fail because fairness represents the ambition of the powerless. When power is attained, charity is typically not the first lever to be pulled. Rather, the primary temptation is to acquire more power.

It’s the desire for ever-rising achievements that drives the greatness of this nation. At the same time, the unmitigated perversion of this impetus also leads to the terribly unnecessary military conflicts we see today, such as Russia’s invasion of Ukraine.

Obviously, no one knows what the next great conflict will be a century or two from today. However, it’s practically a sure bet that some conflict will erupt. With that, investors may leverage the power of inevitability with these defense stocks to buy.

General Dynamics (GD)

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One of the most influential aerospace and defense corporations, General Dynamics (NYSE:GD) developed a range of iconic weapons systems. Perhaps most prominently, the company manufactured the F-16 Fighting Falcon, a single-engine supersonic multirole fighter jet that serves as the backbone of several air forces around the world. Through extensive modifications, it’s still a relevant weapon amid the proliferation of current-generation military aircraft.

Regarding the topic of defense stocks to buy now, General Dynamics presents an enticing case thanks to its artillery business. As one of the primary producers of artillery shells for the U.S. military, the underlying technology might seem old school. However, the Russians exposed how artillery represents a critical cog in modern warfare. As a result, demand for this weapons category should soar.

Also, it’s worth pointing out that GD stock seems a good deal. Presently, shares trade at 20.34x trailing-year earnings, well lower than the sector median 32.8X. Analysts rate GD a moderate buy with a $273.08 price target.

Boeing (BA)

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A distinct idea among defense stocks to buy, Boeing (NYSE:BA) generates the most attention thanks to its civilian aerospace business. As a manufacturer of commercial jetliners, Boeing obviously plays a key role in global commerce, mobility and (physical) connectivity. While this business is a bit questionable given concerns of the revenge travel sentiment fading, over time, a bounce-back is not an impossible prospect.

However, in the meantime, Boeing’s defense contractor business could blossom. Both in its history and in contemporary times, the company established a powerful reputation for developing fearsome weapons systems. In addition, Boeing also specializes in innovative and experimental systems, such as unmanned aerial vehicles (UAVs). While it’s unlikely that we’ll be sending our latest tech abroad, the current geopolitical flashpoints underscore the importance of readiness.

To be fair, Boeing’s financials look a bit messy as it attempts to recover from prior controversies. Still, since 2020, it’s been posting consecutive annual revenue growth. Additionally, analysts peg BA a moderate buy with a $241.88 price target.


Source: IgorGolovniov/shutterstock.com

Arguably the riskiest idea among defense stocks on this list, KBR (NYSE:KBR) represents a multivariate business. Per its public profile, the company focuses on multiple markets involving science, technology, and engineering. Notably, the company has its roots in energy construction though it now focuses on relevant areas such as information technology (IT) solutions. However, that’s where the good news (for now) ends.

Last week, KBR stock suffered a heavy loss due to its financial disclosure. On paper, the company’s third-quarter print was solid, posting earnings per share of 75 cents on revenue of $1.77 billion. These stats modestly beat analysts’ expectations, though investors may have wanted a bit more. Also, KBR’s guidance for full-year earnings implies some downside risk.

Nevertheless, while KBR fell into the weeds, it could be de-risked from its prior lofty position. Also, the company’s space and missile defense acumen – particularly for the Patriot system – is vital for the current defense landscape. Finally, analysts rate KBR a unanimous strong buy with a $69 target.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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