With nearly $300 billion in revenue, the top 15 defense contractors in the world in 2020 prove that the world is far from peace, and that the global superpowers will stop at nothing to establish their dominance. The arms sales industry is one of the biggest in the world, and worth more than $500 billion, of which nearly 60% is contributed by just 15 companies. So what exactly is a defense contractor? A defense contractor is an individual or a business which provides products and services to the military or intelligence agencies of a country, often providing them with weapons and high end defense technology.
While the US has been the top-dog in defense contractors in recent decades, China has started to assert its dominance in the past few years as well, even displacing several Western firms from this list. It is no surprise then that these two economic powerhouses have contributed 11 of the 15 entries on this list.
WorldStock/Shutterstock.com
China’s rise in this industry has been nothing short of incredible, previously with zero entries in the top 100 defense contractors, mainly because it had small defense contractors. However, it now has 6 entries in the top 15, and this change within a year is astonishing, challenging the US for its crown as the most powerful country in the world. This emphasizes the growth of China’s defense as China attempts to build an army capable of taking on any country in the world and winning, something which has been stressed at by its leadership in recent times as well. If you want to compare this list with an older one, you should head on over to top 12 biggest defense contractors in America in 2017.
Insider Monkey’s mission is to identify promising (and also terrible) stock pitches and share them with our subscribers. We leave no stone unturned when looking for the next great investment idea. We read hedge fund investor letters, listen to stock pitches at hedge fund conferences, and put together lists like these to understand the trends before anyone else. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock is still extremely cheap despite already gaining 25 percent. Earlier this week we explained in an email to our free subscribers why Deswell Industries (DSWL) is deeply undervalued and the stock gained 10%. You can subscribe to our e-newsletters below to get these emails before the rest of the market.
To put together our list, we selected the top 100 defense contractors and ranked the top 15 according to their revenue for 2018 (the latest year for which full figures are available early in 2020). For the top 15, we used both their revenue and the percentage growth in revenue as the criteria for their ranking and finalized the list accordingly. We have used these criteria as revenue is the most relevant and important criteria one could use, while the percentage growth also indicates the direction a company is heading towards. So when the world gets destroyed in a global war, let’s take a look at the 15 most likely companies behind it, starting with number 15:
15. China South Industries Group Corporation
Defense Revenue (in millions): $11,963
While the company may be only 20 years old, and engaging in other businesses as well, such as the manufacture of automobiles and motor cycles, it’s revenue from defense alone crosses $11 billion, which is 31% of its total business.
KAI AYASE/Shutterstock.com
14. Almaz-Antey
Defense Revenue (in millions): $9,660
Almaz-Antey is state owned, so profit is not its primary purpose; rather it’s the manufacture of several weapons, such as anti-aircraft defence systems, with the aim of reviving Russia’s waning glory. The company is more or less completely involved in just the arms industry.
iurii/Shutterstock.com
13. China Shipbuilding Industry Corporation
Defense Revenue (in millions): $9,795
One of the largest shipbuilding conglomerates in China, this company may sound boring, but the 20% revenue it derives from defense is anything but, mainly being derived from designing warships and undertaking military research.
Miffynam/Shutterstock.com
12. China North Industries Group Corporation Limited
Defense Revenue (in millions): $14,777
The brother of the aforementioned China South Industries Group Corporation, the company engages in every mundane industry you could think of, apart from some of the more exciting, such as the manufacture of armored assault vehicles and antimissile equipment.
njaj/Shutterstock.com
11. BAE Systems
Defense Revenue (in millions): $22,477
One of the few companies not from China or the US, BAE Systems consistently makes this list, with the company not even growing 1% within the last year and still having a defense revenue that others would kill for.
InsectWorld/Shutterstock.com
10. China Electronics Technology Group
Defense Revenue (in millions): 10,275
China seems to have turned mundane, boring titles into an art, while the company engages in more thrilling endavours, such as creating sophisticated facial recognition softwares and identifying terrorists through software.
Copyright: scanrail / 123RF Stock Photo
9. Leonardo
Defense Revenue (in millions): $9,828
Leonardo is an aerospace and defense company, with nearly 70% of the revenue accruing from the defense work it carries out.
Copyright: slidezero / 123RF Stock Photo
8. China Aerospace Science and Industry Corporation
Defense Revenue (in millions): 12,130
Back to China, we have another state owned company which is the prime contractor for China’s space program, in addition to manufacturing high end weapons for the military.
7. Raytheon Company
Defense Revenue (in millions): $25,163
More than 90% of Raytheon’s total revenue can be credited to its defense work, and the company just won a $1 billion missile contract a few days ago, so expect it to be higher on this list next year.
Pixabay/Public Domain
6. Airbus
Defense Revenue (in millions): $13,063
Aeronautical and defense go hand in hand with most of our entries in the top 15 defense contractors in the world, with Airbus being known as one of the more popular ones, selling military aerospace products, which make up less than a fifth of its total revenue.
VanderWolf Images/Shutterstock.com
5. Lockheed Martin
Defense Revenue (in millions): $50,536
The biggest defense contractor in the world based on revenue, and has perhaps played the most important part in improving America’s defense, especially the development of the F-35 fighter jet, which is the most expensive military project in history.
Philip Pilosian / Shutterstock.com
4. Aviation Industry Corporation of China
Defense Revenue (in millions): $24,902
Employing over 500,000 people with over a hundred subsidiaries and 27 listed countries, this company is definitely no joke.
SpaceKris/Shutterstock.com
3. General Dynamics
Defense Revenue (in millions): $24,055
One of the biggest companies you may now have known about, General Dynamics was behind the development of perhaps the most famous fighter jet of all time, the F-16.
Pixabay/Public Domain
2. Northrop Grumman
Defense Revenue (in millions): $25,300
Developing high tech products for the military, Northrop was behind the first-ever unmanned, autonomous air system to operate from an aircraft carrier.
Pixabay/Public Domain
1. Boeing
Defense Revenue (in millions): $34,050
Boeing tops the list of the 15 top defense contractors in the world in 2019, having grown 66% in the past year. While more popular for its airplanes, and the recent controversy surrounding the quality of its aircraft or lack thereof, Boeing also manufactures bomber aircraft, experimental aircraft and unmanned aerial vehicles, among many other products in its portfolio.
Pixabay/Public Domain
