3 Under-the-Radar Defense Stocks Quietly Beating the Market

Core Insights - Defense and aerospace companies are outperforming a stagnant market in 2026 due to increased government spending on national security and advanced weapons systems [1][2] - Three companies highlighted are Booz Allen Hamilton, Honeywell International, and Teledyne Technologies, each showing unique strengths and challenges [1][2] Booz Allen Hamilton - Reported EPS of $1.77, exceeding estimates by 39%, largely due to a $0.50 per share tax benefit [1] - Revenue of $2.62 billion missed estimates by 3.86% and declined 10.2% year-over-year, with the Civil segment significantly impacted by a government shutdown [1] - Record Q3 backlog of $38 billion and a 7% dividend increase to $0.59 per share [1] Honeywell International - Undergoing a corporate transformation by splitting aerospace and automation businesses, expected to complete in Q3 2026 [1] - Q4 revenue of $4.52 billion showed 13% reported growth and 21% organic growth, with Defense and Space contributing $1.975 billion [1] - Free cash flow for the full year reached $5.1 billion, up 3.43%, with adjusted EPS guidance for 2026 between $10.35 and $10.65 [1] Teledyne Technologies - Achieved record Q4 2025 results with non-GAAP EPS of $6.30, beating estimates by 26% and revenue growth of 7.3% year-over-year to $1.61 billion [1] - Aerospace and Defense Electronics segment grew 40.4%, marking its fourth consecutive quarter of accelerating growth [1] - Free cash flow exceeded $1 billion for the second consecutive year, with significant acquisitions and share repurchases [1]