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 Woodward Inc. (NASDAQ:WWD) 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 close-up of a fuel pump operated by a robotic arm, symbolizing the company’s technology-driven industrial solutions.
Woodward Inc. (NASDAQ:WWD)
Woodward Inc. is a Colorado-based company leading in energy conversion and control solutions for the aerospace and industrial sectors. Recently, the company announced a 12% rise in its quarterly dividend, from $0.25 to $0.28. While this assures commitment to shareholders, many analysts believe that the giant is prioritizing short-term shareholder returns. This view particularly stems from the management’s statement regarding potential risks surrounding future revenue projections.
Although the CEO of Woodward, Chip Blankenship, has highlighted major lean transformation, operational improvements, and automation investments, the success of these initiatives is limited by ongoing supplier challenges and labor issues. Moreover, analysts are also wary of the declining industrial segment sales due to shrinking China on-highway sales.
The leadership still finds supply chain issues as the reason behind not achieving pre-COVID normalcy. Despite the Safran acquisition improving electromechanical actuation, without a proper supply system, the company is unable to reap complete benefits from the M&A. Despite these issues, the company is a solid bet on increased defense spending globally.
Overall, WWD ranks 4th on our list of defense and aerospace stocks to benefit from Trump’s peace through strength policy. While we acknowledge the potential of WWD 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 WWD 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.
