Boeing vs. RTX: Which Defense Stock Offers Better Value in 2026?

Core Insights - Heightened global unrest is driving increased defense spending by the U.S. and its allies, benefiting major aerospace and defense companies like Boeing and RTX Corporation [1][2] Defense Spending Trends - U.S. President Donald Trump proposed a defense budget increase to approximately $1.5 trillion by 2027, up from $901 billion for fiscal 2026, focusing on modernization and technological innovation [2] - Governments are prioritizing upgrades to existing fleets and next-generation aircraft programs, creating a favorable environment for established defense contractors [2] Company Performance: Boeing (BA) - Boeing is a leading aircraft manufacturer in the U.S., experiencing solid demand in the commercial aerospace sector, with strong delivery and order activities [4] - The Boeing Defense, Space & Security unit secured $15 billion in orders in Q4 2025, resulting in a backlog of $85 billion, with revenues increasing by 37% in the same quarter [5][9] - Boeing's 2026 earnings per share (EPS) estimate has decreased by 31.58% over the past 60 days [8][9] Company Performance: RTX Corporation (RTX) - RTX has received significant orders for its defense products, achieving $10.3 billion in bookings in Q4 2025 and a record backlog of $268 billion [6][9] - The company recorded a defense backlog of $107 billion as of December 31, 2025, with expectations for robust growth in both domestic and international programs [7] - RTX's 2026 EPS estimate has increased by 1.49% over the past 60 days [8][9] Financial Comparisons - Boeing's shares trade at a forward Price/Sales ratio of 1.84X, while RTX's is at 2.79X [11] - Boeing's total debt to capital ratio is 90.84%, compared to RTX's 36.1%, indicating better debt management for RTX [12] - In the past six months, RTX shares have increased by 22.9%, while Boeing shares have declined by 2% [13] Investment Outlook - Both companies are positioned for long-term growth, with Boeing benefiting from strong funding for fighter jet programs and RTX from steady demand for its defense systems [14] - Current preference leans towards RTX due to its earnings growth projection, better debt management, and superior price performance compared to Boeing [15]