Agriscience company Corteva (CTVA -0.04%), imaging and instrumentation technology specialist Teledyne Technologies (TDY 0.65%), and aerospace and defense giant Raytheon Technologies (RTX 1.08%) are all stocks smart investors will want to buy now. But why?

Well, for starters, all three of these companies operate in growth markets. It also helps that all three are in the process of strengthening their underlying earnings potential. Read on to learn more about want makes these three stocks smart investments.

1. Corteva, a turnaround play in progress

This agriscience company hasn't always been universally popular with investors. For example, activist investor Starboard Value was sharply critical of the company's performance and management. Ultimately, Starboard and Corteva agreed to appoint three directors (with vast experience at Monsanto, Deere, and Dow) of Starboard's choice in 2021. A new CEO, Chuck Magro, was appointed in November 2021. Since his appointment, the stock price is up 45% compared to an 11% decline in the S&P 500 over the same timeframe.

In line with Starboard's criticism, Magro is streamlining the organization by cutting costs, moving away from less profitable end markets, reducing net royalty payments by growing sales of seeds and crop protection products under its own technology, and increasing investment in research and development (to develop new differentiated products).

With these actions in place, the plan is to hit earnings before interest, taxation, depreciation, and amortization (EBITDA) of $4.4 billion in 2025, up from $3.2 billion in 2022. Given the strength of key crop prices (inducing farmers to plant more crops like soybeans) -- and, in turn, farmers' incomes -- and Corteva's progress (organic sales up 15% and operating EBITDA up 25% in 2022), the company is well on its way to hitting its 2025 targets and has good growth prospects ahead of it.

US Soybean Farm Price Received Chart

Data by YCharts.

2. Teledyne, imaging the future

If Corteva's story is about restructuring how it does business, Teledyne Technologies' transformation is about positioning itself in favorable end markets. At the start of the last decade, Teledyne generated about a third of its sales from aerospace and defense electronics, another third from instrumentation, and around 19% from engineered systems, with the rest of its end markets contributing less than 10%.

Fast forward to 2022, and after a host of acquisitions, Teledyne is now a company focused on digital imaging (57% of 2022 revenue) and instrumentation (23%). The shift improved the company's margin profile and positioned it in attractive end markets.

TDY Chart

Data by YCharts. EBITDA = earnings before interest, taxes, depreciation, and amortization. TTM = trailing 12 months.

With the growing adoption of digitization and advanced analytics in the economy, it's becoming increasingly important to sense and capture images of products digitally -- whether for machine vision in factory automation, radiotherapy in healthcare, aerospace and defense, or geospatial activities. Meanwhile, increasing environmental awareness makes Teledyne's test and measurement solutions more relevant.

They are both attractive end markets. Teledyne offers investors extra security in a downturn, given that around a quarter of its sales come from the U.S. government or its prime contractors.

3. Raytheon Technologies, firing on all cylinders

This aerospace and defense company also offers investors a mix of relatively secure defense end markets and more volatile commercial aerospace markets. The good news is both its end markets are set for medium-term growth.

The commercial aerospace market continues to recover from the ravages imposed by travel restrictions during lockdowns. In addition, Raytheon's defense orders are strengthening in line with an increased awareness of security needs in light of the conflict in Europe.

For example, management expects its commercial aftermarket revenue to grow by 20% in 2023. On the defense side, Raytheon missiles and defense book-to-bill ratio (bookings divided by sales) for the full year was 1.37, with its backlog at a record $34 billion. These figures imply strong growth in the coming years.

Furthermore, as Pratt & Whitney aircraft engines are used more, they will require more servicing. Finally, when the widebody market (planes often used in intercontinental traffic) fully joins the recovery party, Raytheon will benefit even more, as widebodies tend to generate more aftermarket revenue per plane. It all adds up to a robust growth environment for Raytheon.