General Electric Stock And 2 Defense Stocks To Own

Arctic security is back on the agenda. The U.S. decision to reopen a Cold War-era base in Greenland and lock in a long term security role there underlines how governments are again prioritising air, space, and defence capabilities. That renewed focus directs attention to companies that build the hardware and provide the services that keep that system running. This article highlights three aerospace and defence stocks from the US market worth a closer look.

The three stocks below are just a sample, and the full screen surfaced 73 more aerospace and defense businesses with equally compelling stories that are not covered here. To identify and analyze the highest conviction ideas in this space, head into the Aerospace And Defense screener.

General Electric (GE)

Overview: General Electric, through GE Aerospace, builds and services commercial and military jet engines, propulsion systems, and aircraft systems worldwide.

Operations: General Electric generates about US$37.7b from Commercial Engines & Services, US$11.5b from Defense & Propulsion Technologies, and US$1.4b from Corporate & Other activities.

Market Cap: US$326.1b

General Electric matters in this Aerospace And Defense screen because its jet engines, propulsion systems, and long-term service contracts sit directly in the middle of how aircraft actually fly and how defense fleets stay mission ready.

"Acceleration of next generation engine programs such as adaptive cycle engines and CCA propulsion, supported by rising defense book to bill of 1.7x and a Defense & Propulsion Technologies backlog above US$30b, points to multi year visibility on future defense revenue and contribution to segment profit."

What happens to margins and cash generation if a single key assumption about how efficiently that growing engine fleet is serviced breaks?

If that servicing assumption is wrong, the full narrative for General Electric shows how engine economics, backlog quality, and defense exposure could be accelerating a very different cash story.

Lockheed Martin (LMT)

Overview: Lockheed Martin is a global defense contractor that builds and supports military aircraft like the F-35, missiles, helicopters, and space systems for governments worldwide.

Operations: Lockheed Martin generates about US$31.2b from Aeronautics, US$19.8b from Rotary and Mission Systems, US$16.4b from Missiles and Fire Control, and US$13.8b from Space, with most revenue coming from U.S. customers.

Market Cap: US$123.1b

Lockheed Martin matters for this Aerospace And Defense screen because its F-35 fighter line and wider missile portfolio link directly to frontline air power and missile defense that allies are actively funding today.

"Demand for advanced platforms such as the F-35, PAC-3, THAAD, and hypersonic weapons is being reinforced by actual combat use and rising geopolitical tensions. Multiple U.S. and international customers are increasing orders. Management also highlights a strong backlog, with executives expressing confidence about revenue growth prospects."

What happens to future margins and cash generation if one quiet constraint on missile and interceptor production capacity proves harder to fix than investors expect?

If that constraint is what really caps the story, the full narrative for Lockheed Martin shows where Lockheed Martin’s earnings power could be accelerating or quietly stalling.

Kratos Defense & Security Solutions (KTOS)

Overview: Kratos Defense & Security Solutions builds unmanned aerial systems, missile and hypersonic propulsion, and satellite and microwave subsystems for defense-focused aerospace customers worldwide.

Operations: Kratos Defense & Security Solutions generates about US$317.4 million from Unmanned Systems and US$1.2b from Kratos Government Solutions, mostly from U.S. clients.

Market Cap: US$8.9b

Kratos Defense & Security Solutions matters in this Aerospace And Defense screen because its unmanned aircraft, missile engines, and space-linked electronics plug directly into front line national security programs.

"Kratos' early investments in serial production of tactical drones (for example, Valkyrie), along with rapid scaling in missile propulsion and microelectronics, put it ahead of competitors as demand for unmanned and autonomous solutions escalates globally. With sole-source and first-to-market positions, Kratos is positioned for significant incremental revenue and higher-margin growth as large contracts come online, particularly as international orders with premium margins increase."

What happens to Kratos Defense & Security Solutions’ long term earnings power if a single assumption about how quickly these programs scale proves wrong?

If that scaling risk is on your mind, the full narrative for Kratos Defense & Security Solutions explains how Kratos Defense & Security Solutions’ drone and propulsion pipeline could be accelerating beyond headline expectations.

Seeking Alternatives Before The Crowd?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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