Tuesday , 28 June 2022

Military Equipment Supplier Stocks UP 8% Since Start of Russia-Ukraine War

Companies in the defense sector offer a wide range of products and services to their main customer, the U.S. government and some are better investments than others. Here’s what you need to know about investing in the defense sector and how to pick where to put your money.

An original article by Lorimer Wilson, Founder & managing Editor of munKNEE.com – “A financial site for sore eyes and inquisitive minds” – and Your KEY To Making Money! 

Here’s a look at some of the biggest names in defense and their performances since the market close on February 25 days after Russia began their invasion of Ukraine: @$$4$

  1. Leidos Holdings (LDOS): UP +12.1%
    • focus include intelligence and surveillance, cybersecurity, complex logistics
    • market capitalization of $14.8B
    • dividend yield of 1.3%
  2. Northrop Grumman Corp. (NOC): UP +11.8%
    • makes most of the U.S. fleet of bombers and components for warplanes made by others
    • market capitalization of $71.5B
    • dividend yield of 1.4%
  3. Lockheed Martin Corp. (LMT): UP +11.5%
    • specializes in warplanes, helicopters, missiles and electronics
    • market capitalization of $120.9B
    • dividend yield of 2.5%
  4. General Dynamics Corp. (GD): UP +7.2%
    • focused on warships, tanks and information technology
    • market capitalization of $68.0B
    • dividend yield of 2.1%
  5. Raytheon Technologies Corp. (RTX): +4.4%
    • makes a number of missile systems and defense electronics systems
    • market capitalization of $152.7B
    • dividend yield of 2.0%
  6. The Boeing Company (BA): DOWN -6.2%
    • has a large defense business focused on planes and drones that makes up less than one-third of total sales
    • market capitalization of $111.6B
    • no dividend

Defense ETFs

If you are bullish on defense but would rather not choose among individual companies, you can buy shares in one or more exchange-traded funds (ETFs) such as those listed below::

  1. SPDR S&P Aerospace & Defense (XAR): UP +8.0%
    • dividend yield of 0.7%
  2. Invesco Aerospace & Defense (PPA): UP +7.4%
    • dividend yield of 0.5%
  3. iShares U.S. Aerospace & Defense (ITA): UP +5.1%
    • dividend yield of 0.6%

Caveat

Defense stocks are best suited for income-oriented investors seeking steady growth and rising dividends rather than major increases in stock prices. Large defense contractors generate much better margins on research and development into advanced new weapons systems than they do from selling one-off missiles or ammunition and these projects tend to have multiyear timetables. As such, there is likely not going to be much of a near-term sales boost due to the Russian invasion of Ukraine other than possible opportunities for incremental new sales, particularly to U.S. allies in Eastern Europe. Any gains tied to the conflict are not likely to be enough to alter the investment thesis on these defense titans.

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