We recently published a list of 13 Best Defense Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Howmet Aerospace Inc. (NYSE:HWM) stands against other best defense stocks to buy according to billionaires.
Defense stocks wobbled over the past week after a contentious meeting at the Oval Office between President Trump and the visiting Ukrainian leader, Volodymyr Zelensky as investors hoped for the US-Ukraine minerals deal to be signed.
The sector has struggled since Trump’s return to the White House, amid mixed statements on military expenditure throughout his campaign and the early days of his second stint. Shares fell sharply on February 13 after the President hinted at cutting defense spending in the future. The creation of DOGE is also reshaping investors’ views of the industry.
READ ALSO: 10 Best Large Cap Defense Stocks to Buy Now and Why These 15 Defense Stocks Are Skyrocketing So Far In 2025.
In contrast, European defense stocks have rallied this year as governments faced pressures to increase military expenditure. Several stocks registered double-digit growth during the week of March 3, with some even reaching record highs. Investor sentiment picked up after the European Summit in London, where leaders from the EU and NATO met to express their support for Ukraine, following the recent Zelensky-Trump spat.
Washington has repeatedly called for European countries to spend more on defense, while stressing that the US could no longer foot the bill. EU leaders met in Brussels this Thursday to discuss the ‘ReArm Europe Plan’, which will allow the bloc to mobilize funds up to $860 million through bonds and relaxed rules on borrowing and spending.
European countries are also ramping up defense on an individual-level. A conservative victory in Germany, signaling the shift to the right in Berlin, is also adding to the momentum. According to a Reuters report, parties in talks to form the nation’s next government are already considering setting up a defense fund. Friedrich Merz, Germany’s next chancellor-in-waiting, has also vowed to relax the country’s strict borrowing rules.
Peter Schaffrik, Global Macro Strategist, at RBC Capital Markets stated the following on the ongoing situation:
It is an inflection point and Europe realises it needs to do the heavy lifting. The German elections have opened the door for more spending. The whole Zelensky-Trump meltdown has fast forwarded everything.
Methodology
For this article, we scanned Insider Monkey’s Q4 2024 proprietary database of billionaires’ stock holdings and identified defense stocks from the list. From there, we picked the top 13 stocks with the highest number of billionaires having a stake in them. Where two or more stocks were tied on billionaire sentiment, we used the dollar value of billionaire holdings as a tiebreaker between them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Engineers examining stress tests of an aircraft engine, working to make sure its ready for flight.
Howmet Aerospace Inc. (NYSE:HWM)
Number of Billionaires: 14
Billionaire Holdings: $862,559,575
Howmet Aerospace Inc. (NYSE:HWM) manufactures components for aircraft engines, fasteners, aluminum wheels for trucks, and titanium structures for aerospace and defense applications. It is among the best defense stocks to buy according to billionaires.
On February 13, the company declared results for the fourth quarter and full year 2024. It generated a revenue of $1.9 billion in Q4, representing a 9% increase from last year, driven by robust growth in the commercial aerospace business. Net income was posted at $314 million, growing 33% from last year.
Howmet Aerospace Inc. (NYSE:HWM)’s full year revenue stood at $7.4 billion, up 12% from last year. Net income grew from $765 million in 2023 to $1.2 billion during the year. GAAP EPS for the year was logged at $2.81, compared to $1.83 per share in the prior year.
During the fourth quarter, Howmet Aerospace Inc. (NYSE:HWM) repurchased $190 million of common stock and paid a quarterly dividend of $0.08 per share. In January, the company repurchased another $50 million of shares and increased its quarterly dividend by 25% to 10 cents per share, reflecting HWM’s commitment to shareholder returns.
After strong results in 2024, Howmet Aerospace Inc. (NYSE:HWM) has raised its guidance for fiscal 2025 and now expects revenue growth to be around 8% year-over-year, coupled with improved profitability and cash generation. The company is anticipating another strong year amid rising OEM production rates, continued demand for commercial aviation and engine spare parts, and growth in the defense aerospace aftermarkets.
Wall Street analysts are bullish on Howmet Aerospace Inc. (NYSE:HWM) with a consensus Buy rating and an average share price upside potential of 3.4%.
Overall, HWM ranks 4th on our list of best defense stocks to buy according to billionaires. While we acknowledge the potential of HWM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HWM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
