• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

“I don’t think there’s any such thing as the ability to easily use tactical nuclear weapons and not end up with Armageddon.”

That’s a scary picture. The possibility of nuclear war makes all other problems seem trivial in comparison.

And that means for investors, there’s one segment that simply can’t be ignored — defense.

A safe haven amid global uncertainty?

In a world where technology is advancing rapidly, defense stocks may not look as exciting as the ones that come from Silicon Valley. But here’s the thing: no matter what the economy is doing — and what the Fed does to its benchmark interest rates — governments worldwide tend to prioritize national security.

In other words, defense contractors can make money even when the economy slows down. With many experts forecasting a recession this year, that’s a good quality to have.

Don’t forget, we live in a time of increasing geopolitical tensions. No one wants to see Armageddon, but if conflicts arise, you can bet that defense spending will likely increase.

In fact, the amount that countries are spending on their militaries is already astronomical. According to the Stockholm International Peace Research Institute, global military expenditure totaled $2.113 trillion in 2021.

With that in mind, let’s take a look at three defense stocks. This trio also pays dividends.

Elevate Your Investments with Moby

Gain a competitive edge with Moby's expert investing insights. Our data-driven analysis and personalized recommendations empower you to make smarter investment decisions. Enhance your portfolio and stay ahead of market trends. Start your journey to financial success today at Moby.

Get Started

Lockheed Martin

Known for its F-35 fighter jets, Lockheed Martin (NYSE:LMT) is the largest defense contractor in the world by revenue.

The company operates through four business segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space.

In Q4 of 2022, each of the four segments delivered higher net sales compared to a year ago.

For the entire company, net sales grew 7% year over year to $19.0 billion.

Lockheed Martin pays quarterly dividends of $3.00 per share, translating to an annual yield of 2.6%.

Going forward, the company will likely remain busy as its backlog totaled $150.0 billion as of Dec. 31.

Read more: Your cash is trash: 4 simple ways to protect your money against white-hot inflation (without being a stock market genius)

General Dynamics

General Dynamics (NYSE:GD) is deeply entrenched in the global aerospace and defense business. It offers a broad portfolio of products and services, ranging from Gulfstream business jets and combat vehicles to nuclear-powered submarines and communications systems.

In 2022, revenue grew 2.4% from 2021 to $39.4 billion while net earnings improved 4.1% to $3.4 billion.

General Dynamics chairman and CEO Phebe N. Novakovic remarked that the company had “good backlog growth” fueled by “robust demand at Gulfstream.”

Indeed, General Dynamics’ backlog of $91.1 billion was the highest in its history.

The company paid $1.4 billion in dividends in 2022 and currently yields 2.2%.

Follow These Steps Once Your Portfolio Reaches $100K

If you've amassed a $100k+ portfolio, it's time to meet with a trusted advisor. Zoe Financial's elite network of fiduciary advisors offers personalized strategies to enhance your financial success. Experience exclusive investment opportunities and bespoke wealth management services.

Trust Zoe Financial for unparalleled expertise and a commitment to your prosperity.

Get Started

Northrop Grumman

Given the heightened military spending and concerns about the potential for military conflict, it’s no surprise that defense stocks have become the better performers in the market.

Case in point: shares of Northrop Grumman (NYSE:NOC) shot up 20% in the last 12 months, in stark contrast to the S&P 500’s 8% decline over the same period.

Northrop Grumman is another heavyweight player in the aerospace and defense industry. It built the B-2 stealth bomber — the only stealth bomber in the world. In fact, the B-2 is so iconic that it has appeared in quite a few movies, including Independence Day and Armageddon.

The U.S. Department of Defense recently unveiled the B-21 Raider — the next-generation stealth bomber built by Northrop Grumman.

In 2022, the company generated $36.6 billion in revenue, up 3% from 2021. Northrop Grumman has a quarterly dividend rate of $1.73 per share, which comes out to an annual yield of 1.5%

What to read next

Sponsored

This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

Jing Pan Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.