10 Defense Stocks with the Highest EPS Growth in 5 Years

4. AAR Corp. (NYSE:AIR)

EPS Growth, Past 5 Years: 44.78%

AAR Corp. (NYSE:AIR) provides products and services to commercial aviation, government, and defense customers worldwide. It is one of the best defense stocks to buy, with its EPS growing by nearly 45% over the last five years.

This month, the company completed the sale of its Landing Gear Overhaul business to GA Telesis for $51 million. The divestiture is part of AAR Corp. (NYSE:AIR)’s strategic vision to optimize its portfolio by focusing on core functions that will accelerate the company’s targeted growth and margin expansion initiatives.

On March 27, AAR Corp. (NYSE:AIR) declared financial results for the third quarter of the fiscal year 2025. It reported a revenue of $678 million, growing 20% from last year, driven by robust demand for the company’s aftermarket services. However, the figure fell short of expectations. Adjusted diluted EPS was logged at $0.99, up 16% year-over-year.

After the earnings call, Keybanc and Truist Securities lowered their price targets for AAR Corp. (NYSE:AIR), while maintaining their Overweight and Buy ratings for the stock. The overall sentiment around the company is encouraging, with analysts having a consensus Buy rating and an average share price upside potential of 61%.

According to Insider Monkey’s database for Q4 2024, 19 hedge funds held a stake in AAR Corp. (NYSE:AIR), up from 18 at the end of the third quarter.