The defense sector consists of companies that provide military goods and services, which include aerospace and defense manufacturing, cybersecurity, and advanced technologies. This sector is popular for its stability because it is often backed by government defense spending. This tends to remain consistent regardless of economic conditions. Stocks in this sector, such as those of companies producing military aircraft, vehicles, weaponry, and surveillance technology, can fall under the category of less sensitive to economic cycles.
Defensive stocks, while commonly inclusive of utilities and consumer staples, also feature defense sector companies due to their steady demand irrespective of economic downturns. Investing in defensive stocks can provide investors with a buffer against market volatility, as these companies often offer consistent dividends and robust performance during economic downturns. However, the growth potential of defensive stocks may have limitations in comparison to cyclical stocks. which can rise significantly during economic upturns.
One disadvantage of investing in defense stocks specifically includes their dependency on government budgets and policies, which can shift with changes in political leadership. Additionally, these companies can be involved in controversies or ethical dilemmas related to global military operations and defense contracts. This can potentially affect public perception and stock value. Despite these risks, the defensive nature of these stocks often makes them attractive during uncertain market conditions, providing a measure of safety for investment portfolios. Keeping this on top of mind, here are two defense stocks to watch in the stock market today.
Defense Stocks To Watch Today
- RTX Corporation (NYSE: RTX)
- Lockheed Martin (NYSE: LMT)
RTX Corp. (RTX Stock)
First, RTX Corporation (RTX) is an aerospace and defense company that operates worldwide. It provides advanced systems and services for commercial, military, and government customers. Its key products include aircraft engines, avionics, aerostructures, cybersecurity, missiles, air defense systems, and drones.
Earlier this month, RTX Corp announced that its Raytheon business unit has secured a Navy ManTech project. It was awarded by Penn State University Applied Research Laboratory’s Electronics Manufacturing Center of Excellence. The goal is to help enhance the production process of SPY-6 Transmit/Receive (TR) modules. The initiative focuses on integrating manufacturing advancements such as automation, sourcing of new materials, and improvements in process yields. This is anticipated to reduce the cost of production for the U.S. Navy over the SPY-6 radar’s lifecycle.
In 2024 thus far, shares of RTX Corp have increased by 38.64% YTD. Meanwhile, during Monday’s premarket trading session, RTX stock is trading flat, looking to open at around $118.08 a share.
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Lockheed Martin (LMT Stock)
Next up, Lockheed Martin (LMT) is a global aerospace, defense, security, and advanced technologies company with worldwide interests. It is popular for its manufacturing of military aircrafts. However, its operations extend into various fields including missile and fire control, rotary and mission systems, space systems, and energy solutions. Lockheed Martin is a major contractor for the U.S. Department of Defense.
Just this month, Lockheed Martin announced it has been awarded a contract by NASA to create the next-generation GeoXO Lightning Mapper (LMX) for NOAA. The contract has a value of about $297 million. In detail, the contract covers the development of two instruments, with options for two more. This is an effort to improve severe weather monitoring capabilities. The LMX will offer advanced detection and measurement of lightning, aiding forecasters in storm analysis and prediction while enhancing safety measures for tornadoes, hurricanes, and other severe weather conditions.
Year-to-date, shares of LMT stock have advanced by 25.39% so far. Moreover, during Monday’s premarket trading session, Lockheed Martin stock looks set to open at around $571.92 a share.
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