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, it’s important to look beyond financial performance. Consider the company’s contract backlog and relationships with government agencies. Assess their ability to innovate and adapt to changing defense needs. Be aware of global political situations that might affect defense spending. Consider the potential impact of international arms control agreements. With that being said, here are two defense stocks to check out in the stock market right now.
Defense Stocks To Buy [Or Avoid] Today
- Northrop Grumman Corporation (NYSE: NOC)
- General Dynamics Corporation (NYSE: GD)
Northrop Grumman Corporation (NOC Stock)
First up, Northrop Grumman Corporation (NOC) is a global aerospace and defense technology company. They design, develop, and manufacture advanced aircraft, space systems, missile defense systems, and cybersecurity solutions. Northrop Grumman is notable for its work in autonomous systems, space exploration, and next-generation aircraft.
Last month, Northrop Grumman Corporation announced when it will be releasing its third quarter 2024 financial results. The company plans to post these results on its investor relations website on October 24, 2024. Northrop Grumman will issue an advisory release before the market opens, notifying the public about the availability of the full earnings report. The company also scheduled a conference call for 9 a.m. Eastern time on the same day.
Year-to-date, shares of NOC stock have increased by 13.82% thus far. Meanwhile, during Monday morning’s trading session, Northrop Grumman Corp stock opened slightly lower on the day so far by 0.26%, currently trading at $535.06 a share.
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General Dynamics (GD Stock)
Second, General Dynamics Corporation (GD) is a multinational aerospace and defense corporation. They operate through four main business segments: aerospace, marine systems, combat systems, and technologies. General Dynamics produces a wide range of products including Gulfstream business jets, submarines, land combat vehicles, and IT services.
In September, General Dynamics announced that its subsidiary, NASSCO, received a significant contract from the U.S. Navy. The contract is for the construction of up to eight additional John Lewis-class fleet replenishment oilers. The initial award for the tenth ship in the series is valued at $780 million. If all eight ships are built, the total contract value could exceed $6.7 billion. This agreement extends NASSCO’s involvement in the T-AO program, making it the longest Navy production series in the company’s history.
In 2024 so far, shares of GD stock have gained by 15.73% YTD. Moreover, during Monday morning’s trading session, General Dynamic’s stock is trading modestly lower so far by 0.46%, currently trading at $299.27 a share.
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