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 Northrop Grumman Corporation (NYSE:NOC) 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.
An aeronautics engineer inspecting a model aircraft engine in a factory setting.
Northrop Grumman Corporation (NYSE:NOC)
Northrop Grumman Corporation is an American manufacturer providing solutions in the fields of defense and commercial aerospace, electronics, and information technology (IT). Serving not only as a supplier to Boeing’s military aircraft programs, the giant is also known for making non-nuclear ships for the U.S. Navy. Analysts expect the company to follow a sustained growth path due to a surge in military spending, particularly from the U.S. Department of Defense.
Donald Trump in his inaugural speech stated to achieve “Peace through Strength”, implying expanding the military to ensure peace. With almost 86% of revenue generated from the U.S. Department of Defense, this promise could be fruitful for the company. Even if global conflicts subside during Trump’s term, increased defense spending in the US and EU should favor the company’s growth.
But that’s not all. International expansion continues to secure the company’s dominant position. NOC maintains a strong outlook for global demand in 2025, expecting a double-digit foreign revenue growth that surpasses the US growth rate. The Space System (SS) segment, in particular, is anticipated to witness growth throughout the year, with major restructuring facilitating both Aeronautics Systems (AS) and Defense Systems (DS).
Northrop Grumman Corporation is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held NOC at the end of the third quarter which was 49 in the previous quarter.
Overall, NOC ranks 1st on our list of defense and aerospace stocks to benefit from Trump’s peace through strength policy. While we acknowledge the potential of NOC 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 NOC 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.
