Core Viewpoint - RTX Corporation is well-positioned to navigate the dual currents of rising geopolitical instability and resilient demand for commercial air travel, supported by its dual mandate in aerospace and defense [1][11]. Group 1: Defense Segment - The Raytheon segment of RTX is a key driver of stability, with a record defense backlog of $93 billion at the end of 2024, providing predictable revenue less affected by economic cycles [2][4]. - Key programs contributing to this backlog include the Patriot air and missile defense system, which recently secured a $2.4 billion contract with Germany, and advanced munitions like the AMRAAM missiles, which received a $299.7 million contract modification [3][4]. - The transition to advanced systems is highlighted by a recent $1.9 billion award for the U.S. and Poland, showcasing the demand for modern defense capabilities [4]. Group 2: Commercial Aerospace Segment - The commercial aerospace businesses, including Pratt & Whitney and Collins Aerospace, are experiencing growth driven by the recovery in air travel, with a 21% year-over-year increase in commercial aftermarket sales in Q1 2025 [5]. - The Pratt & Whitney GTF engine issue has been addressed with a clear management plan, leading to a 30% increase in MRO output in 2024, ensuring a predictable and high-margin services business [6]. - The commercial backlog for RTX stands at $125 billion, indicating strong future growth potential, supported by over 950 new orders for the GTF engine in 2024 [7]. Group 3: Financial Performance and Valuation - RTX's current P/E ratio is approximately 24, reflecting a premium valuation that many investors associate with quality and stability in the market [8]. - The company has a dividend yield of 1.86% and recently increased its dividend by 7.9%, demonstrating management's confidence in future cash flows and a commitment to returning value to shareholders [10][12]. - RTX has a strong track record of dividend payments, with an 88-year history, reinforcing its status as a reliable blue-chip investment [12]. Group 4: Strategic Balance - The strategic balance of RTX, with its defense segment providing stability and its commercial aerospace segment offering growth, allows the company to operate effectively across various economic scenarios [11]. - This operational strength translates into financial fortitude, enabling RTX to deliver tangible value to its shareholders [12].