What is the top defense stock?

Lockheed Martin is both the largest pure-play defense company and the one with the greatest revenue diversity across different agencies and platforms. Although it doesn't always outperform in the near term, it is the top choice among defense stocks for long-term-focused investors.

Are defense stocks a good buy?

Defense stock valuations tend to be tied to government spending, which can mean periods of underperformance. However, over the long run, defense stocks offer growth rates higher than inflation and steady dividend income, making them a solid choice for investors seeking stability and income in their portfolios.

What are the most undervalued defense stocks?

Leidos Holdings is the most undervalued among the major defense stocks, with a price-to-earnings (P/E) ratio of about 9.7 in July 2026. Defense IT specialists tend to trade at a discount to some of the more diversified contractors.

Which defense stocks pay dividends?

Most established defense companies, with the exception of Boeing, pay dividends, and Boeing will likely seek to pay a dividend again in the future. Among defense stocks, Lockheed Martin paid the highest dividend in July 2026, with a 2.6% yield.

Who is the biggest defense contractor?

Lockheed Martin is the biggest defense contractor in terms of defense-specific revenue, but both Boeing and RTX have larger market caps thanks to their presence in both defense and commercial aerospace.

How does the U.S. defense budget affect defense stocks?

Defense spending makes up about 13% of the total U.S. budget, and procurement -- the actual buying of weapons and other supplies -- is about 17% of total defense spending. The U.S. defense budget provides most of the funding for these defense companies, and there are winners and losers each year when the budget is released. However, there are typically no volatile reactions in the stocks. Defense procurement is a multiyear endeavor, meaning no one year is make-or-break for a defense contractor. Investors should look at big-picture trends over time, such as rising defense spending or lawmakers prioritizing other areas, for clues on how stocks might move in the future.

What defense stock does Warren Buffett own?

Historically, Buffett has not been an active defense investor. But in 2024, Berkshire Hathaway (NYSE:BRKB) invested in Heico (NYSE:HEI), an aerospace component company that has significant exposure to defense.

8 Best Defense Stocks for 2026 and How to Invest

By Lou Whiteman – Updated Jul 9, 2026 at 8:31 PM EST | Fact-checked by Frank Bass

Key Points

Defense stocks are less volatile, suitable for investors seeking steady growth.
U.S. government, a stable customer, is a key revenue source for defense stocks.
Top defense stocks include Lockheed Martin, Boeing, and Northrop Grumman.

Defense stocks get the bulk of their revenue from one customer -- the U.S. government. Fortunately, that customer has deep pockets and a long history of paying its bills. The federal government's stability provides defense companies and investors with some predictability when managing cash and projecting growth.

Companies in the defense sector offer a wide range of products and services to their main customer, 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 your money should go.

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Soldiers in uniform with weapons backlit by sunset. — Image source: Getty Images.

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Ticker Information Table
Name and ticker	Current price	Market capMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.	Dividend yield
Lockheed Martin (NYSE:LMT)	$523.22	$120.6 billion	2.61%
Boeing (NYSE:BA)	$222.28	$175.2 billion	0.00%
Northrop Grumman (NYSE:NOC)	$539.63	$76.6 billion	1.74%
General Dynamics (NYSE:GD)	$375.06	$101.4 billion	1.65%
RTX (NYSE:RTX)	$195.93	$263.9 billion	1.41%
Leidos (NYSE:LDOS)	$107.02	$13.5 billion	1.58%
L3Harris Technologies (NYSE:LHX)	$290.77	$54.2 billion	1.69%
AeroVironment (NASDAQ:AVAV)	$144.58	$7.3 billion	0.00%

Data as of Jul 11, 2026. Showing 8 of 8 total entries.

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Let's look closer at these standout companies.

1. Lockheed Martin

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NYSE: LMT

Lockheed Martin

Today's Change

(0.96%) $4.96

Current Price

$523.22

Key Data Points

Market Cap

$121B

Day's Range

$513.81 - $524.00

52wk Range

$410.11 - $692.00

Volume

662.8K

Avg Vol

1.4M

Gross Margin

10.70%

Dividend Yield

2.61%

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Lockheed Martin is the world's largest defense company and the U.S. government's biggest contractor. It's also the lead contractor on the F-35 Joint Strike Fighter, the world's most expensive airplane, with a projected cost of $2 trillion over the next few decades.

Lockheed's legendary Skunk Works research facility in California is world-renowned. The company has leveraged its research muscle to become a leader in advanced fighter planes, high-tech missiles, and cutting-edge electronics.

2. Boeing

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NYSE: BA

Boeing

Today's Change

(-0.37%) $-0.83

Current Price

$222.28

Key Data Points

Market Cap

$175B

Day's Range

$219.57 - $223.87

52wk Range

$176.77 - $254.35

Volume

127.1K

Avg Vol

6.5M

Gross Margin

4.83%

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Boeing is best known for its commercial airplanes, but its defense business, though accounting for just one-third of the company's total revenue, is large enough to rank among the industry's titans. Boeing makes several aircraft and helicopters for the Pentagon and is involved in space pursuits. The company's defense business has also branched out into autonomous submarines and other products.

Boeing has been a tough stock to own since the beginning of the decade, and the shares are still significantly below their 2019 high. Troubles persist on Boeing's commercial side, but the company remains an important vendor to the U.S. government. If Boeing can successfully work through the operational troubles that have plagued it, there is significant upside potential for the stock.

3. Northrop Grumman

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NYSE: NOC

Northrop Grumman

Today's Change

(1.39%) $7.40

Current Price

$539.63

Key Data Points

Market Cap

$77B

Day's Range

$529.93 - $541.08

52wk Range

$493.84 - $774.00

Volume

455.9K

Avg Vol

941K

Gross Margin

20.52%

Dividend Yield

1.74%

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Northrop Grumman is responsible for stealth bombers and has a large space portfolio. The company is closely tied to the nuclear triad -- a combination of nuclear missiles, bombers, and submarines able to strike back if the nation is attacked.

Northrop is the second-largest stand-alone defense contractor and, in years past, would sometimes be overlooked in favor of Lockheed Martin. But Northrop Grumman's portfolio is more closely tied to key Pentagon priorities, including the triad, making it a good option for investors seeking predictable growth in the years to come.

4. General Dynamics

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NYSE: GD

General Dynamics

Today's Change

(0.12%) $0.46

Current Price

$375.06

Key Data Points

Market Cap

$101B

Day's Range

$370.86 - $375.98

52wk Range

$293.95 - $380.71

Volume

Avg Vol

1.3M

Gross Margin

15.24%

Dividend Yield

1.65%

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General Dynamics is one of two primary military shipbuilders and has a portfolio of tanks and land vehicles, making it one of the go-to vendors for the U.S. Army. General Dynamics also has one of the largest defense-focused information technology (IT) and services businesses, providing some revenue stability during periods when the Pentagon cuts back on equipment purchases.

Ship construction is complex, and individual vessels can take years to complete, leading to some quarter-to-quarter revenue volatility. General Dynamics tries to offset that choppiness via its more predictable IT business. Still, investors should be aware that the mix of businesses can make it difficult to predict quarterly results.

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5. RTX

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NYSE: RTX

RTX

Today's Change

(0.37%) $0.73

Current Price

$195.93

Key Data Points

Market Cap

$264B

Day's Range

$192.59 - $196.69

52wk Range

$143.56 - $214.50

Volume

2.8M

Avg Vol

5.5M

Gross Margin

20.21%

Dividend Yield

1.41%

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RTX, formerly Raytheon Technologies, doesn't make warships or fighters. However, it does have a role in a wide range of important military platforms led by other contractors. It is the product of the 2020 merger between Raytheon, a defense electronics and missile specialist, and United Technologies, which makes aircraft engines and various other aerospace parts.

The Pentagon has drawn down its weapons stockpile in recent years, which should lead to significant demand for missiles and other RTX goods in the years to come. The company also benefits from upside in its commercial business, which has experienced a multiyear cycle of strong demand for spare parts to keep the existing aviation fleet aloft.

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6. Leidos Holdings

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NYSE: LDOS

Leidos

Today's Change

(0.38%) $0.40

Current Price

$107.02

Key Data Points

Market Cap

$13B

Day's Range

$105.29 - $109.00

52wk Range

$98.86 - $205.77

Volume

1.1M

Avg Vol

1.5M

Gross Margin

17.91%

Dividend Yield

1.58%

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Leidos Holdings is a large IT contractor that has also actively expanded into hardware, providing the electronics and brains for autonomous ships and building a strong portfolio of classified research capabilities geared toward the intelligence and space communities.

The push to make government more efficient comes with both risks and rewards for these IT companies. Leidos and other IT companies specialize in providing services that were once done in-house at lower cost, creating opportunities. But government watchdogs aiming to cut costs will be looking closely at these contracts for ways to save.

7. L3Harris Technologies

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NYSE: LHX

L3Harris Technologies

Today's Change

(0.31%) $0.90

Current Price

$290.77

Key Data Points

Market Cap

$54B

Day's Range

$288.12 - $291.37

52wk Range

$257.35 - $379.23

Volume

626.5K

Avg Vol

1.4M

Gross Margin

22.19%

Dividend Yield

1.69%

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L3Harris was formed in 2019 through the merger of Harris Corp. and L3 Technologies. Both were defense electronics and sensor suppliers that hoped to leverage their combined scale to better compete with the larger contractors for prime positions on defense contracts.

The company has spent most of the decade streamlining its portfolio and investing in new technologies. Today, it is a major vendor of tactical communications and reconnaissance systems, night-vision equipment, complex space sensors, and other defense electronics products.

8. AeroVironment

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NASDAQ: AVAV

AeroVironment

Today's Change

(-2.57%) $-3.82

Current Price

$144.58

Key Data Points

Market Cap

$7.3B

Day's Range

$143.01 - $148.41

52wk Range

$135.20 - $417.86

Volume

1.3M

Avg Vol

1.6M

Gross Margin

18.93%

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AeroVironment is a leader in the drone business, developing a sophisticated line of small and medium-sized aircraft that have proven invaluable in the war in Ukraine. That conflict has been a proof of concept for AeroVironment, putting the company on the radar of military buyers at the Pentagon and among U.S. allies.

AeroVironment is still early in its growth cycle. In 2025, the company acquired BlueHalo to expand its presence in the markets for larger drones, autonomous water systems, and space technology.

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How to invest in defense companies

Open your brokerage account: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
Search for the stock: Enter the ticker into the search bar to bring up the stock's trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
Submit your order: the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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Benefits and risks of investing in defense stocks

There are pros and cons to investing in defense stocks. Here are some factors to consider before adding them to your portfolio.

Benefits

Stable and predictable demand from a customer that invests in national security at all stages of the cycle.
Long-term contracts give management teams strong revenue visibility, allowing for planning, and provide stability.
High barriers to entry due to the specialized nature of the products and the difficulties of governmental regulations and contracts.
A history of technological innovation that can translate outside of defense. From Velcro to the internet, many of the products we take for granted today originated either within or adjacent to the aerospace sector.

Risks

Politics can be unpredictable, and changes in government priorities or a new administration can force management teams to rethink their long-term planning.
Cost overruns are increasingly a problem for the contractor. If a company is not well run and does not keep its costs under control, it can eat into earnings.
Supply chain chaos can lead to program delays. Large defense platforms rely on dozens of suppliers, each with layers of smaller vendors beneath it. An issue anywhere in that chain can lead to cost overruns or delays for the entire program.
Ethical concerns are a common reason to avoid defense stocks. These companies make lethal weapons, and not all investors want that in their portfolio.

Methodology: How these stocks were chosen

There is a growing number of defense and defense adjacent stocks to choose from, including start-ups with exciting plans for the future. But government procurement is a ruthless game, and the large prime contractors who know the Pentagon best tend to secure much of the revenue.

We leaned heavily on the primes when compiling this list, while still trying to include some younger, higher-growth-potential stocks like AeroVironment and L3Harris to capture upside.

One thing you won't see here: start-ups with very little revenue. Although some of these companies have the potential to rise through the ranks, they need to survive basic training before they make the cut as investment candidates.

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Should you invest in defense stocks?

Defense companies manufacture lethal products and may support operations or intelligence-gathering that some find unsettling. Some investors don't want to support those activities and may avoid becoming shareholders in defense stocks.

Like many industrial stocks, defense stocks tend to be more plodding than high-flying technology or biotech stocks. But that also means they are less volatile than some sectors. Defense stocks are best suited for income-oriented investors seeking steady growth and rising dividends rather than immense valuation increases.

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FAQ

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Investing in defense stocks: FAQ

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About the Author

Lou Whiteman is a contributing Motley Fool stock analyst covering aerospace, defense, transport, manufacturing, specialty finance, and bank stocks. Previously, Lou was a financial analyst and senior writer for TheStreet, a venture capital specialist for The Deal LLC, and a high school personal finance teacher. He holds a bachelor’s degree in communications from Loyola University Maryland and completed a fellowship at the ABA Stonier Graduate School of Banking.

TMFLouWhiteman

@louwhiteman

Lou Whiteman has positions in General Dynamics, L3Harris Technologies, Leidos, and Lockheed Martin. The Motley Fool has positions in and recommends AeroVironment, Boeing, L3Harris Technologies, Leidos, and RTX. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

8 Best Defense Stocks for 2026 and How to Invest

Key Points

1. Lockheed Martin

Key Data Points

2. Boeing

Key Data Points

3. Northrop Grumman

Key Data Points

4. General Dynamics

Key Data Points

5. RTX

Key Data Points

6. Leidos Holdings

Key Data Points

7. L3Harris Technologies

Key Data Points

8. AeroVironment

Key Data Points

How to invest in defense companies

Benefits and risks of investing in defense stocks

Benefits

Risks

Methodology: How these stocks were chosen

Should you invest in defense stocks?

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FAQ

Investing in defense stocks: FAQ

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1. Lockheed Martin

2. Boeing

3. Northrop Grumman

4. General Dynamics

5. RTX

6. Leidos Holdings

7. L3Harris Technologies

8. AeroVironment

How to invest in defense companies

Benefits and risks of investing in defense stocks

Benefits

Risks

Methodology: How these stocks were chosen

Should you invest in defense stocks?

Related investing topics

FAQ

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Investing in defense stocks: FAQ

What is the top defense stock?

Are defense stocks a good buy?

What are the most undervalued defense stocks?

Which defense stocks pay dividends?

Who is the biggest defense contractor?

How does the U.S. defense budget affect defense stocks?

What defense stock does Warren Buffett own?

Key Data Points

8 top defense stocks for 2026