In this article, we will take a look at the 5 best aerospace and defense stocks to buy. To read our analysis of the recent trends, and market activity, you can go to the 12 Best Aerospace and Defense Stocks to Buy.
5. Raytheon Technologies Corporation (NYSE:RTX)
Number of Hedge Fund Holders: 48
Arlington, Virginia-based Raytheon Technologies Corporation (NYSE:RTX) is one of the world’s largest aerospace and defense companies with a market capitalization of more than $144 billion and FY 2022 revenue of $67 billion.
Raytheon Technologies Corporation (NYSE:RTX) was formed through an all-stock merger between Raytheon Company and United Technologies Corporation on April 3, 2020. Post-merger, the company has plans to return $33 billion to $35 billion to its shareholders through share repurchases and dividends through the end of 2025, including $3 billion of share repurchases planned in 2023.
Raytheon Technologies Corporation (NYSE:RTX) has paid regular cash dividends on its common stock since 1936. On June 5, the company’s Board of Directors declared a quarterly cash dividend of $0.59 per common share.
Raytheon Technologies Corporation (NYSE:RTX) secured $21 billion in new orders during Q1 2023 which brought its order backlog to $180 billion. The company expects full year revenue of $72 billion to $73 billion.
4. HEICO Corporation (NYSE:HEI)
Number of Hedge Fund Holders: 49
Hollywood, Florida-based HEICO Corporation (NYSE:HEI) is engaged primarily in the design, production, servicing and distribution of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications, and electronics industries.
HEICO Corporation (NYSE:HEI) has grown rapidly with intermittent acquisitions to bolster its product offerings. On May 15, the company announced that it had agreed to acquire Wencor Group from Warburg Pincus LLC and Wencor’s management in a cash and stock transaction valued at $2.05 billion.
On June 13, BofA analyst Ronald Epstein raised the price target on HEICO Corporation (NYSE:HEI) shares to $220 from $190 and maintained a ‘Neutral’ rating for the shares. This represents a potential upside of nearly 25%, based on the share price as of July 3.
HEICO Corporation (NYSE:HEI) was a common component of the portfolios of 49 hedge funds out of the 943 tracked by Insider Monkey. Notable investors included Giverny Capital, Select Equity Group, and Citadel Investment Group, among others.
3. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 52
Founded in 1916, The Boeing Company (NYSE:BA) is one of the world’s largest aerospace companies and a leading provider of commercial airplanes, defense, space and security systems, and global services. As of May 31, the company had a backlog of 5,351 unfulfilled airplane orders with narrow-body commercial aircraft, 737, accounting for more than 4,200 of these orders.
The Boeing Company (NYSE:BA) has announced multiple large contracts recently including the Air India order of up to 290 Single-aisle and widebody jets, as well as secured commitments from Riyadh Air and Saudi Arabian Airlines for up to 121 787 airplanes.
As of Q1 2023, The Boeing Company (NYSE:BA) shares were held by 52 hedge funds with a total value of $2.2 billion. Ken Fisher’s Fisher Asset Management was its largest hedge fund shareholder with ownership of 4.4 million shares valued at $926 million.
2. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 58
Bethesda, Maryland-based Lockheed Martin Corporation (NYSE:LMT) is a global security and aerospace company engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products, and services.
On July 2, the Ministry of Defense of Israel said that the government has approved the purchase of a third squadron of F-35 stealth fighter aircrafts in a deal that has been valued at $3 billion. The F-35s will be manufactured by Lockheed Martin Corporation (NYSE:LMT) and will bring the total number of F-35s in the country’s air force to 75.
Lockheed Martin Corporation (NYSE:LMT) has the highest dividend yield on our list of top 12 best aerospace and defense stocks to buy. The company currently pays a quarterly cash dividend of $3.0 per share which translates to a 2.59% dividend yield based on the closing share price on July 3.
As of Q1 2023, Lockheed Martin Corporation (NYSE:LMT) was the second best aerospace and defense stock to buy based on hedge fund sentiment as 58 of them held its shares with a total value of $1.5 billion. Two Sigma Advisors was the largest hedge fund shareholder with ownership of 0.6 million shares valued at $297 million.
1. TransDigm Group Incorporated (NYSE:TDG)
Number of Hedge Fund Holders: 67
Based in Cleveland, Ohio, TransDigm Group Incorporated (NYSE:TDG) is a leading global designer, producer, and supplier of highly engineered aircraft components for commercial and military aircraft. Its product offerings include actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, and others.
On May 9, TransDigm Group Incorporated (NYSE:TDG) reported strong quarterly results for the three months ended April 1. Its net sales increased by 20% y-o-y to $1.6 billion while net income stood at $304 million.
During the same week, TransDigm Group Incorporated (NYSE:TDG) completed the acquisition of highly engineered testing and technology development services and systems provider Calspan Corporation for nearly $750 million in a cash transaction.
TransDigm Group Incorporated (NYSE:TDG) is the best aerospace and defense stock to buy now according to the number of hedge funds that held its shares as of March 31, 2023. The stock was owned by 67 prominent hedge funds out of the 943 tracked by Insider Monkey, with a total value of $5.6 billion. AltaRock Partners, Stockbridge Partners, and Matrix Capital Management, were the top 3 hedge fund shareholders of the stock with ownership of nearly $1.0 billion worth of shares each.
You may also like to read 10 Best Marine Shipping Stocks to Buy Now and 11 Best Packaging Stocks to Buy Now
