10 Best Defense Stocks To Buy Now

08. The Boeing Company (NYSE:BA)

Number of Hedge Fund Holders: 42

The Boeing Company (NYSE:BA) stands out as a top defense stock due to its involvement in the aerospace and defense sectors, where it delivers innovative solutions across military and security domains. The company’s Defense, Space, and Security (BDS) segment plays a critical role in national security, producing manned and unmanned aircraft, missile systems, and advanced surveillance technologies. The Boeing Company (NYSE:BA) defense portfolio is positioned to benefit from heightened global defense spending, making it a key pick in the defense industry.

In Q2 2024, The Boeing Company (NYSE:BA) reported financial results that, while missing earnings expectations, still demonstrated fundamental strength in its long-term defense outlook. The company reported revenue of $16.9 billion, with its defense division contributing $6 billion, marking a 2% decline due to fixed-price development losses. The operating margin in the defense sector was down to -15.2%, primarily driven by cost overruns in key programs like the KC-46A Tanker and T-7A training aircraft. However, The Boeing Company (NYSE:BA) backlog remains strong at $59 billion in defense contracts, underscoring the consistent demand for its products and services.

Key developments in Boeing’s defense portfolio include the successful delivery of seven MH-139 helicopters to the U.S. Air Force and the first CH-47F Block 2 Chinook to the U.S. Army. Additionally, Boeing’s F-15EX fighter jet program achieved a milestone by reaching initial operating capability, further strengthening its position as a long-term defense contractor.

Despite short-term financial challenges, The Boeing Company (NYSE:BA) strong backlog, high demand for military aircraft, and improving execution in its fixed-price contracts suggest a favorable long-term outlook. As Boeing stabilizes its production and cost structure, particularly in its BDS segment, it is well-positioned to regain profitability and capitalize on defense spending trends. With growing geopolitical tensions, The Boeing Company (NYSE:BA) defense programs will continue to play a vital role in global security, making the stock an attractive investment in the defense sector.