As a former active duty Air Force member, defense companies naturally peak my interest. After all, I used their equipment, I know what works and what doesn't, and I've worked alongside many a defense company employee. And though they're not as glamorous as say, a tech company, these three companies bring in considerable amounts of revenue, which should spell cha-ching to investors!
The behemoth
Massive: That is the only way to describe Boeing
- The first 18 planes are due to be delivered by 2017. That may seem like a small number, but in the defense world, 18 planes by 2017 is a mammoth task.
- This is a fixed-priced contract. In the past, Boeing has been granted extensions and additional government funding if the contract runs over budget. With a fixed-price contract, that is not an option. As such, if Boeing's price quote is off, the government could:
- Sue them for breach of contract.
- Force them to take the added expense out of their profits.
- Cancel the contract (very unlikely though).
A Foolish investor should keep those things in mind before investing in Boeing. But, if Boeing is able to deliver as promised, the sky's the limit for this defense giant.
Boeing |
2010 |
2009 |
2008 |
---|---|---|---|
Backlog* |
$321,826 |
$315,558 |
$351,926 |
Revenues* |
$64,306 |
$68,281 |
$60,909 |
Dividends Per Share |
$1.68 |
$1.68 |
$1.62 |
*Numbers in millions.
The investor-focused
Sure, it's not as big as Boeing, but Northrop Grumman
- The company believes in itself.
- Earnings will be divided by fewer outstanding shares, which raises the value of each share.
Northrop Grumman |
2010 |
2009 |
2008 |
---|---|---|---|
Backlog* |
$64,183 |
$69,186 |
$76,415 |
Sales & Service Revenues* |
$34,757 |
$33,755 |
$32,315 |
Dividends Per Share |
$1.84 |
$1.69 |
$1.57 |
*Numbers in millions.
The small(er), but impressive, total package
With approximately 90,000 employees, General Dynamics
General Dynamics |
2010 |
2009 |
2008 |
---|---|---|---|
Backlog* |
$59,561.00 |
$65,545.00 |
$74,127 |
Sales & Service Revenues* |
$32,466 |
$31,981 |
$29,300 |
Dividends Per Share |
$1.68 |
$1.52 |
$1.40 |
*Numbers in millions.
The deal on defense
Defense companies may not be the most glamorous companies to invest in -- a tank is no white iPhone, for example -- but if you think about it, they may be some of the best: With the security of America depending on what these companies bring to the table, it's unlikely they'll disappear into the sunset any time soon.
What do you think? Want to watch Boeing, Northrop Grumman, and General Dynamics in action? Click on their links to add them to your watchlist.