The year 2024 has seen a surge in geopolitical tensions, with ongoing conflicts in the Middle East and Europe threatening global financial stability. This climate of uncertainty has investors considering the best military stocks to buy.
Defense contractors stand to benefit from increased government spending on military equipment, offering the potential for stability and growth. However, investing in the military and defense sector requires a broad understanding of geopolitics, defense budgets, and technological advancements shaping modern warfare. With PwC estimating double-digit growth for the defense industry in 2024, military stocks are poised to benefit tremendously.
Now, let’s discover the best military stocks to buy now amid global conflicts in 2024!
Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT) is a behemoth in the aerospace and defense industry. They are the world’s largest defense company, and the U.S. government’s biggest defense contractor.
Lockheed Martin is known for its iconic F-35 fighter jet, and boasts a diverse portfolio of aircraft, missiles, satellites, and other advanced defense systems. The company is a major beneficiary of rising defense budgets in the United States, where it enjoys a close relationship with the Department of Defense. Additionally, they are heavily involved in next-generation technologies like hypersonic weapons.
This will allow the company to be at the forefront of future defense needs as geopolitical tensions continue to rise. In FY23, Lockheed Martin net sales rose a modest 2% YOY to $67.6 billion. However, EPS rose 27% YOY to $27.55 per share. Free cash flow remained healthy, and their backlog hit a record $160.6 billion. Management has reiterated continued top line growth in FY24, making Lockheed Martin one of the top military stocks to buy now.
General Dynamics (GD)
General Dynamics (NYSE:GD) is another major player in the military sector, offering a diversified portfolio across aerospace, combat vehicles, information systems, and ship building. This allows the company to capitalize on growth opportunities in various defense segments.
One of General Dynamic’s key strengths is its focus on land combat systems. The company’s Abram tank and Bradley fighting vehicle are cornerstones of the U.S. Army, and their continued relevance and innovation in modern warfare helps ensure steady demand. Moreover, GD is a leader in tactical communications and information systems, a rapidly growing segment within the defense industry. In Q4 2023, the business saw diversified growth and generated strong cash flows from operations. They reduced their debt by $1.2 billion in the quarter, while growing a record backlog of $93.6 billion. With General Dynamics reporting their highest quarterly revenue and EPS in the company’s history, investors should certainly keep it on their radar in 2024.
CACI International (CACI)
CACI International (NYSE:CACI) stands out from the traditional military stocks to buy. While it doesn’t manufacture weapons or military hardware, CACI plays a crucial role in supporting government defense and intelligence operations.
The company specializes in IT services, cybersecurity, and mission support, providing critical infrastructure and expertise to national security agencies. Some of their products include advanced electronic warfare and electromagnetic pulse protection. Their deep understanding of government needs makes them indispensable allies to the U.S. government. In Q2 FY24, CACI’s revenue increased 11% YOY to $1.8 billion. EPS saw modest growth of 2% to $3.74 per share, as the company continued to grow their backlog. New contracts awarded in the second quarter totalled $2.2 billion, with primary business generated from the U.S. Army and U.S. Airforce. With management increasing their guidance for FY24, investors have a chance to snap up shares on the dip.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
