RTX to LHX: 5 aerospace, defense stocks with 2-digit 1-year return

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Highlights

  • Raytheon Technologies Corporation (NYSE: RTX) stock has a P/E ratio of 38.76 and a dividend yield of 2.03%.
  • Lockheed Martin Corporation's (NYSE: LMT) dividend yield is 2.51, and its annualized dividend is US$11.20.
  • L3Harris Technologies, Inc. (NYSE: LHX) stock P/E is 67, and the dividend yield is 1.81%, with an annualized dividend of US$4.48.

The aerospace and defense sector manufactures weapons, military hardware and telecommunications equipment, navigation systems, advanced electronic devices, aircraft and other defence-related products.

The defense industry orders soared after the Russia-Ukraine war broke out. In March, Congress approved an omnibus spending package, which included US$782 billion for defense and US$13.6 billion for military and humanitarian assistance for Ukraine. The 5.6% increase in defense spending shows the government's high stakes in the war's success, favoring Ukraine.

Here we discuss five stocks that returned two-digit gains year-to-date and one-year basis.

Raytheon Technologies Corporation (NYSE: RTX)

Closing price on April 25, 2022: US$99.61
Market capitalization: US$148.45 billion

Waltham, Massachusetts-based Raytheon Technologies is a diversified aerospace and defense industrial company. As a prime and subprime contractor, it has equal exposure to the commercial aerospace industry and the defense market.

Its four operating segments are Pratt & Whitney, Collins Aerospace, intelligence, space and airborne systems, and integrated defense and missile systems. 

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For the first quarter ended March 31, 2022, the company reported sales of US$15.7 billion compared to US$15.3 billion for Q1 in the previous year. Its net income came in at US$1.1 billion or US$0.74 per share diluted compared to US$0.772 billion or US$0.51 per share diluted in the previous year. 

The company expects its sales to be between US$67.75 and US$68.75 billion for full-year 2022.

The stock has a P/E ratio of 38.76, and the forward P/E for one year is 20.80. Its dividend yield is 2.03%, with an annualized dividend of US$2.04.

The stock traded in the range of US$106.02 to US$79.00 in the last 52 weeks.

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Lockheed Martin Corporation (NYSE: LMT)

Closing price on April 25, 2022: US$442.89
Market capitalization: US$119.85 billion

Lockheed Martin is a defense contractor. Its largest segment is aeronautics, followed by rotary and mission systems, missiles and fire control, and space systems. The company is headquartered in Bethesda, Maryland.

For the quarter ended March 27, 2022, its total net sales were US$14.96 billion compared to US$16.26 billion in the previous year’s quarter. Its net earnings were US$1.7 billion or US$6.44 per share diluted compared to US$1.84 billion or US$6.56 per share diluted for the same quarter in 2021. 

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The company declared a second-quarter dividend of US$2.80 per share to shareholders on record at the close of business on June 1, 2022. The dividend is payable on June 24, 2022. 

The stock has a P/E ratio of 19.89, and the forward P/E for one year is 16.54. Its dividend yield is 2.51%, with an annualized dividend of US$11.20.

The stock traded in the range of US$479.99 to US$324.23 in the last 52 weeks.

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Northrop Grumman Corporation (NYSE: NOC)

Closing price on April 25, 2022: US$385.53
Market capitalization: US$69.45 billion

Falls Church, Virginia-based Northrop Grumman is a defense contractor. Northrop’s operating segments are aeronautics, mission systems, defense services, and space systems. 

It will release first-quarter results on April 28, 2022.

The company posted a net income of US$7.0 billion or US$43.54 per diluted share on the sales of US$35.67 billion in the fiscal year ended December 31, 2021. For fiscal 2020, its net income was US$3.19 billion or US$19.03 per diluted share on the sales of US$36.8 billion.

The stock has a P/E ratio of 10.23, and the forward P/E for one year is 17.90. Its dividend yield is 1.4%, with an annualized dividend of US$6.28.

The stock traded in the range of US$490.82 to US$336.03 in the last 52 weeks.

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General Dynamics Corp (NYSE: GD)

Closing price on April 25, 2022: US$239.18
Market capitalization: US$66.52 billion

General Dynamics Corp. is a global company. Its portfolio includes business aviation, ship construction and repair, land combat vehicles, weapons systems and munitions, and technology products and services.

For the fiscal ended December 31, 2021, its revenue was US$38.47 billion compared to US$37.9 billion in the previous fiscal. Its net income came in at US$3.26 billion or US$11.55 per share diluted for fiscal 2021 compared to US$3.17 billion or US$11.00 per share diluted for fiscal 2020.

The stock has a dividend yield of 2.11%.

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L3Harris Technologies, Inc. (NYSE: LHX)

Closing price on April 25, 2022: US$242.92
Market capitalization: US$49.9 billion

L3Harris Technologies provide products for the communications, command, computers, intelligence, surveillance, and reconnaissance (C4ISR) market. It also has stakes in the Federal aviation communication infrastructure. The company is based in Melbourne, Florida.

It will release its first-quarter results on April 28, 2022.

For the fiscal ended December 31, 2021, it raked in revenue of US$17.8 billion compared to US$18.19 billion in the previous fiscal. The net income of the company was US$1.85 billion or US$9.09 per share diluted, compared to US$1.12 billion or US$5.19 per share diluted in fiscal 2020.

LHX stock has a P/E ratio of 26.67, and the forward P/E for one year is 17.90. Its current dividend yield is 1.81%, with an annualized dividend of US$4.48.

The stock traded in the range of US$279.71 to US$200.71 in the last 52 weeks.

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Bottom line:

The stock market is volatile and prone to various risks. Hence, investors should carefully analyze the internal and external factors in the economy before investing in stocks.


 


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