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 Lockheed Martin Corporation (NYSE:LMT) 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.
A military aircraft in flight, showing the strength of the company’s combat & air mobility capability.
Lockheed Martin Corporation (NYSE:LMT)
As an aerospace and security company, Lockheed Martin Corporation (NYSE:LMT) designs, develops, maintains, and manufactures technological products, systems, and services. It operates in space, aeronautics, rotary and mission systems, and missiles & fire control segments. The company’s love affair with US government contracts continues despite the government change as the company bagged a $551 million US Navy contract just this week. The contract could be worth as much as $1.37 billion if some of the options included in the contract also materialize.
Another recent development that sets Lockheed Martin (NYSE:LMT) up for a great performance during Trump’s term is Europe’s willingness to increase its defense spending. Donald Trump already emphasizes that European countries need to contribute more, but a recent report by the Financial Times reported that EU leaders are set to discuss ways to deal with countries that are seemingly neutral but also Russia-friendly. This is an attempt to scale up Europe’s defense capabilities and Lockheed Martin (NYSE:LMT) should be able to benefit from it as it generates over 10% of its revenue from the continent’s spending on its defense.
Overall, LMT ranks 2nd on our list of defense and aerospace stocks to benefit from Trump’s peace through strength policy. While we acknowledge the potential of LMT 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 time frame. If you are looking for an AI stock that is as promising as LMT 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.
