5 Top Defense Stocks to Buy as the World Rearms

Company Overview - Northrop Grumman (NOC) is valued at $109 billion and is a major U.S. aerospace and defense contractor, specializing in stealth aircraft, missile defense systems, and space technologies for the U.S. government and its allies [1] - Lockheed Martin (LMT) is valued at $155.7 billion and manufactures fighter jets, missiles, ISR systems, and space systems [4] - RTX Corporation (RTX) is valued at $284.8 billion and is a significant player in the aerospace and defense sector [10] - General Dynamics (GD) is valued at $98.6 billion, focusing on submarines, warships, armored vehicles, and IT services [14] - L3Harris Technologies (LHX) is valued at $70.7 billion, providing communications, sensors, avionics, and ISR systems [18] Financial Performance - Lockheed Martin reported 2025 results with a 6% year-over-year sales increase, free cash flow of $6.9 billion, and a record backlog of $194 billion [4] - Northrop Grumman achieved full-year revenue of $42 billion with adjusted earnings per share of $29.08 and generated $3.3 billion in free cash flow [7] - RTX reported total sales of $88.6 billion, a 10% year-over-year increase, with adjusted earnings per share of $6.29 and free cash flow of $7.9 billion [11] - General Dynamics reported 2025 revenue of $52.6 billion, a 10% increase from 2024, with a backlog of $118 billion and free cash flow of $3.9 billion [15] - L3Harris reported revenue of approximately $21.9 billion, a 5% organic increase year-over-year, with adjusted earnings of $10.73 [19] Market Trends - Global defense spending is rising, reaching an estimated $2.63 trillion in 2025, up from $2.48 trillion the previous year, driven by geopolitical tensions [6] - Increased military budgets due to conflicts, such as the Russia-Ukraine war and U.S.-China tensions, are benefiting defense contractors with large backlogs and combat-proven systems [6] Analyst Ratings - Lockheed Martin stock is rated as a "Moderate Buy" with 23 analysts covering it, including seven "Strong Buy" ratings [2] - Northrop Grumman stock is also rated as a "Moderate Buy" with 22 analysts, including 11 "Strong Buy" ratings [8] - RTX stock maintains a "Moderate Buy" rating with 22 analysts, including 13 "Strong Buy" ratings [12] - General Dynamics stock is rated as a "Moderate Buy" with 23 analysts, including 12 "Strong Buy" ratings [16] - L3Harris stock is rated as a "Strong Buy" with 21 analysts, including 15 "Strong Buy" ratings [20]