We recently published a list of 10 Defense and Aerospace Stocks To Benefit From Trump’s Peace Through Strength Policy. In this article, we are going to take a look at where Howmet Aerospace Inc (NYSE:HWM) stands against other defense and aerospace stocks to benefit from Trump’s peace through strength policy.
Donald Trump is a vocal critic of international conflicts, especially those in which the US gets involved militarily or financially. At his inauguration, he continued the old Republican policy of Peace Through Strength, implying that the US and its allies should increase defense spending not to fight more wars but to ensure fewer wars happen.
In other words, this means defense contractors continue to make money even if global conflicts die down under Donald Trump. EU leaders have just held an informal meeting to discuss transatlantic relations and defense spending. President of the European Commission, Ursula von der Leyen, is considering extraordinary measures to boost defense budgets.
Under these circumstances, it is vital to understand that most defense and aerospace stocks should continue to benefit even during peaceful times. We, therefore, decided to create a list of stocks that are likely to survive any change in policy during the unpredictable Donald Trump’s term.
To come up with our list of 10 Defense and Aerospace stocks that will benefit from Trump’s Peace Through Strength policy, we only considered stocks that have a market cap of at least $5 billion, an ROE of over 15%, and a forward PE under 40 against an industry average PE of 63.
Engineers examining stress tests of an aircraft engine, working to make sure its ready for flight.
Howmet Aerospace Inc. (NYSE:HWM)
Howmet Aerospace Inc. is an advanced engineered solutions provider for the transportation and aerospace industries. The company operates through fastening systems, forged wheels, engine products, and engineered structure segments.
Howmet Aerospace can be considered an AI play in addition to its services to the aerospace industry. Its Industrial Gas Turbines are in demand due to AI and data center energy needs. Moreover, as the US and EU continue to move towards environment-friendly energy options, these turbines are likely to see an increase in demand. These two factors should continue to drive growth in this product.
HWM is also a beneficiary of the supply chain issues in the global aerospace industry. As airlines continue to rely on older aircraft, the need for their maintenance increases. This helps Howmet improve its aftermarket segment’s revenues. The company also raised its dividend by 25% last week. The only drawback is that the company is already at all-time highs, but why wouldn’t it be with such attractive growth prospects?
Overall, HWM ranks 3rd on our list of defense and aerospace stocks to benefit from Trump’s peace through strength policy. While we acknowledge the potential of HWM as a leading AI investment, our conviction lies in the belief that some 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 as promising as HWM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
