2 Defense Stocks to Buy in March

Industry Overview - Global defense spending is increasing, with the United States military budget projected at $838.5 billion for 2026 and a proposed $1.5 trillion for 2027, nearly double the 2026 figure [1] - Germany has significantly raised its military budget, becoming the fourth-largest military spender globally, with plans to double its budget to meet NATO's target of 3.5% of GDP over the next five years [2] Company Analysis: Rheinmetall - Rheinmetall, based in Düsseldorf, has evolved from an artillery manufacturer to a diversified defense contractor producing trucks, tanks, naval vessels, and satellites [5] - The company supplies military equipment to various European armies, including Italy, Ukraine, the Netherlands, the UK, and Germany, and is involved in the development of advanced air defense systems [6][7] - Rheinmetall's sales for 2025 reached €9.9 billion, a 29% increase from 2024, with operating profit growing 33% to €1.8 billion and a backlog increase of 36% [9] - The net profit margin for Rheinmetall improved to 11.8% in 2025, up from 9.19% in 2024, indicating strong financial performance [9] - Continued growth in German military spending is expected to benefit Rheinmetall in the coming years [10] Company Analysis: Lockheed Martin - Lockheed Martin operates in various military sectors, including air, land, sea, space, and cyber warfare, with a strong focus on aerospace [12][13] - The company reported sales of $30.25 billion for 2025, a 6% increase from 2024, although operating profit fell 17% for the year [14] - A significant recovery was noted in Q4 2025, with operating profit up 80% compared to Q4 2024, and a net profit margin of 6.69% was maintained [14] - Lockheed Martin is projected to achieve 5% sales growth for 2026, particularly if the proposed $1.5 trillion military budget is secured [15]