10 Best Defense Stocks To Buy Now

07. Howmet Aerospace Inc. (NYSE:HWM)

Number of Hedge Fund Holders: 45

Howmet Aerospace Inc. (NYSE:HWM) stands out as a significant player in the defense sector, making it an ideal candidate for inclusion on our list of ten best defense stocks to buy now. The company provides critical engineered solutions for aerospace, defense, and transportation industries. Its wide-ranging portfolio, including engine products, fastening systems, engineered structures, and forged wheels, underpins the defense applications of fighter jets, military aircraft engines, and industrial gas turbines. The firm’s strong foothold in the defense aerospace sector, particularly its contributions to programs like the F-35 fighter jets, ensures its relevance as a defense stock.

Howmet Aerospace Inc. (NYSE:HWM) recently reported impressive Q2 2024 financial results, surpassing analysts’ expectations. The company posted earnings per share (EPS) of $0.67, outperforming estimates of $0.601, representing a remarkable 52% increase year-over-year. Revenue for the quarter reached $1.93 billion, reflecting a robust 14% year-over-year growth, with the commercial aerospace and defense segments contributing significantly to this performance. Defense aerospace revenue grew by 11%, driven by strong demand for fighter programs and engine spares.

The company’s ability to expand its market share in the aerospace engine business, particularly in defense and commercial sectors, has contributed to its outstanding performance. Howmet Aerospace Inc. (NYSE:HWM) recorded an impressive EBITDA of $483 million, reflecting a margin of 25.7%, and an operating income of $414 million, with a margin of 22%. This was bolstered by continued growth in commercial aerospace, which saw a 27% increase, and the defense sector, which delivered consistent demand.

Additionally, Howmet Aerospace Inc. (NYSE:HWM) free cash flow remained robust, amounting to $342 million, which further strengthens the company’s financial position. Its focus on reducing debt and optimizing its balance sheet is evident in the early retirement of $205 million in 2024 bonds and bond repurchases. This reduction in interest expense will enhance free cash flow yield, positioning Howmet for sustained profitability. With a healthy cash balance of $752 million and strategic capital expenditures to support future growth, Howmet Aerospace Inc. (NYSE:HWM) presents an attractive investment opportunity for those seeking exposure to defense stocks.