Raytheon Technologies Stock Is Your Best Defense in Turbulent Times

  • Raytheon Technologies (RTX) stock is a rock-solid holding for anyone concerned about market volatility.
  • Moreover, U.S. Navy contracts augment the already strong bullish thesis for a long position in Raytheon.
  • Investors should look to Raytheon Technologies for a balance of growth, value and yield.
Raytheon (RTX) defense company logo hanging from glass building

Source: JHVEPhoto / Shutterstock.com

Raytheon Technologies (NYSE:RTX) is an established company in the aerospace and defense sector. Today is a great day to consider owning at least a few shares of RTX stock as geopolitical turbulence threatens to destabilize the financial markets.

When nations are engaged in military battle, many investors feel skittish and just want to stay all in cash. That’s an understandable sentiment, but not all investments are equally vulnerable in turbulent times.

Indeed, RTX stock has held up well during Russia’s invasion of Ukraine. It just goes to show that Raytheon shares can retain their value during a geopolitical crisis.

Will the stock continue to move upward, though? There are certainly no guarantees, but the evidence points to a compelling bullish thesis as Raytheon provides shareholder value in war and in peace.

Ticker Company Current Price
RTX Raytheon Technologies $99.71

What’s Happening With RTX Stock?

Not long ago, RTX stock broke the psychologically significant $100 barrier. Not only is $100 important because it has zeros in it, but because that number was a prior resistance level in February of 2020, just as the Covid-19 crisis struck the U.S.

So finally, the Raytheon share price recovered recently to pre-Covid-19 levels. It’s a major milestone for the loyal shareholders — but there’s more to the story here.

Remember, share-price levels don’t take dividend payments into account. Folks who held onto RTX stock have collected some nice distributions along the way. Currently, Raytheon Technologies’ forward annual dividend yield is 1.94% — not too shabby.

Should value-focused investors be concerned about the impressive comeback in the Raytheon share price? Not necessarily, as Raytheon Technologies’ trailing 12-month price-to-earnings ratio is 39.77x, which isn’t overly inflated.

Besides, skittish investors shouldn’t lose sleep as RTX stock is exactly the type of asset they should own if they’re concerned about event risk.

InvestorPlace contributor Larry Ramer concisely summed up the connection between Raytheon’s business model and the current geopolitical situation: “In addition to Russia’s invasion of Ukraine, intensified worries about Iran and China are likely to spur much higher defense spending by many nations. The company’s focus on drones and hypersonic missiles makes Raytheon an industry stalwart poised to benefit from current trends.”

A Windfall From a Big Client

Ramer cited a probable ramp-up in government defense spending, and this isn’t just a theoretical concept. Rather, it’s happening in real life as Raytheon Technologies has issued a pair of press releases concerning government contracts worth billions.

First, the company was awarded a contract valued at $651 million, with options totaling $2.5 billion, to produce SPY-6 radars for U.S. Navy ships. Including the options, the contract’s value totals $3.2 billion and Raytheon is tasked with five years of radar production to equip up to 31 Navy ships with the radars.

Less than a month later, Raytheon Technologies issued another eye-opening press release. In it, the company revealed a contract with the U.S. Navy for $483 million with options. If those options are exercised, the contract’s value would total $1.68 billion across five years.

This time, Raytheon is tasked with providing the Navy with “services and professionals to complete the activation and fleet introduction of the three Zumwalt-class destroyers, while continuing to develop technology and warfare capabilities.”

Suffice it to say that the Pentagon is an ideal client for any defense business to have. With billions of dollars to be generated from these two government contracts, Raytheon Technologies remains a lucrative leader in the industry.

What You Can Do Now

Clearly, there’s a lot to like about RTX stock. Dividend collectors, value hunters and safety-minded investors can all benefit from an investment in Raytheon Technologies.

So, don’t hesitate to start a position in the stock if you haven’t already done so. It’s true that crises will happen and nations won’t always get along. Even so, Raytheon will continue to generate revenue and provide exceptional shareholder value.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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Article printed from InvestorPlace Media, https://investorplace.com/2022/04/rtx-stock-raytheon-is-your-best-defense-in-turbulent-times/.

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