Investing in Defense Stocks

By Lou Whiteman – Updated Oct 17, 2025 at 5:33 PM | Fact-checked by Frank Bass

Key Points

U.S. government's financial stability benefits defense firms by ensuring predictable sales and payment.
The defense sector's range of products varies, with some companies being more lucrative investments than others.
Consider U.S. policies and Pentagon priorities to choose promising defense stocks for investment.

Defense companies 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 gives defense companies and investors some predictability when it comes to managing cash and projecting growth.

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

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Company	Defense Focus
Lockheed Martin (NYSE:LMT)	Aviation, space, missiles
Boeing (NYSE:BA)	Aircraft, space, helicopters
Northrop Grumman (NYSE:NOC)	Nuclear efforts, bombers, space
General Dynamics (NYSE:GD)	Shipbuilding, defense IT, tanks
RTX (NYSE:RTX)	Electronics, missiles, aerospace components
Leidos Holdings (NYSE:LDOS)	Defense IT, space
L3Harris Technologies (NYSE:LHX)	Space, electronics, communications equipment
AeroVironment (NASDAQ:AVAV)	Drones, space

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NYSE: LMT

Lockheed Martin

Today's Change

(-0.80%) $-3.94

Current Price

$487.94

Key Data Points

Market Cap

$114B

Day's Range

$484.75 - $491.51

52wk Range

$410.11 - $576.43

Volume

847K

Avg Vol

1.4M

Gross Margin

8.16%

Dividend Yield

0.03%

Lockheed Martin (LMT -0.80%) 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.

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

(1.76%) $3.53

Current Price

$204.55

Key Data Points

Market Cap

$153B

Day's Range

$201.58 - $205.66

52wk Range

$128.88 - $242.69

Volume

8.1M

Avg Vol

7.5M

Gross Margin

1.16%

Dividend Yield

N/A

Boeing (BA +1.76%) is best known for its commercial airplanes, but its defense business -- although accounting for just one-third of total company 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 almost 50% less than their 2019 high. Troubles remain on the commercial side of Boeing, 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 a lot of upside potential for the stock.

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3. Northrop Grumman

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NYSE: NOC

Northrop Grumman

Today's Change

(-1.38%) $-8.04

Current Price

$575.41

Key Data Points

Market Cap

$83B

Day's Range

$571.68 - $581.19

52wk Range

$426.24 - $640.90

Volume

658K

Avg Vol

746K

Gross Margin

19.42%

Dividend Yield

0.01%

Northrop Grumman (NOC -1.38%) 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 standalone 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

(-0.88%) $-3.03

Current Price

$341.87

Key Data Points

Market Cap

$93B

Day's Range

$339.44 - $344.05

52wk Range

$239.20 - $360.50

Volume

1.4M

Avg Vol

Gross Margin

15.33%

Dividend Yield

0.02%

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NYSE: RTX

RTX

Today's Change

(-0.89%) $-1.59

Current Price

$176.91

Key Data Points

Market Cap

$239B

Day's Range

$175.50 - $178.54

52wk Range

$112.27 - $181.31

Volume

210K

Avg Vol

4.5M

Gross Margin

20.13%

Dividend Yield

0.01%

RTX (RTX -0.89%), 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 expended some of its stockpile of weapons in recent years, which should lead to significant demand for missiles and other RTX goods in the years to come. The company also gets some upside from its commercial business, which has enjoyed a multiyear cycle of strong demand for spare parts to keep the existing aviation fleet aloft.

6. Leidos Holdings

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NYSE: LDOS

Leidos

Today's Change

(1.35%) $2.58

Current Price

$193.05

Key Data Points

Market Cap

$24B

Day's Range

$188.25 - $194.12

52wk Range

$123.62 - $202.90

Volume

1.6M

Avg Vol

825K

Gross Margin

17.56%

Dividend Yield

0.01%

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NYSE: LHX

L3Harris Technologies

Today's Change

(-0.19%) $-0.54

Current Price

$288.56

Key Data Points

Market Cap

$54B

Day's Range

$285.95 - $289.89

52wk Range

$193.09 - $308.12

Volume

42K

Avg Vol

1.1M

Gross Margin

22.31%

Dividend Yield

0.02%

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NASDAQ: AVAV

AeroVironment

Today's Change

(-0.47%) $-1.74

Current Price

$368.17

Key Data Points

Market Cap

$18B

Day's Range

$364.26 - $378.57

52wk Range

$102.25 - $417.86

Volume

14K

Avg Vol

1.1M

Gross Margin

26.45%

Dividend Yield

N/A

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Military drone in the sky at sunset with sun rising over mountain in background. — Image source: Getty Images.

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Are defense stocks right for your portfolio?

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

Like many industrials, 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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About the Author

Lou Whiteman is a contributing Motley Fool industrials and financial services 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.

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