General Dynamics
Like other major defense contractors, General Dynamics Corp. (NYSE: GD) looks poised to deliver solid numbers and guidance the rest of this year and perhaps beyond. It is engaged in business aviation, land and expeditionary combat vehicles and systems, armaments, munitions, shipbuilding and marine systems, and information systems and technologies.
Major products include Virginia-class nuclear-powered submarine and Ohio class replacement, Arleigh Burke-class Aegis, Abrams M1A2 tank, Stryker 8-wheeled assault vehicle, medium-caliber munitions and gun systems, tactical and strategic mission systems.
Top analysts expect the company to modestly beat earnings expectations for the third quarter and possibly raise guidance. They also expect solid numbers from the Gulfstream division.
General Dynamics stock comes with a 2.38% dividend. Wells Fargo’s price target of $249 compares with a $263.94 consensus target and Friday’s close at $212.17 per share.
Lockheed Martin
This is another top aerospace and defense stock to buy, and it still offers investors looking to buy shares a solid entry point. Lockheed Martin Corp. (NYSE: LMT) researches, designs, develops, manufactures, integrates, operates and sustains advanced technology systems, products and services. It also provides a wide range of defense electronics products and IT services.
Being the Pentagon’s prime contractor, Lockheed Martin offers a diverse portfolio of global aerospace, defense, security and advanced technologies. Its leveraged presence in the Army, Air Force, Navy and IT programs guarantees a steady inflow of follow-on orders, not only from the U.S. government but also from many foreign allies of the nation.
Over the past several years, Lockheed Martin’s backlog has substantially outgrown the rest of the industry, supporting the growth outlook for the foreseeable future. The company has exposure to Defense Department priority buckets and consistently executes well. Even if the end market growth rate slows, continued strong fundamentals can be expected, with compounding earnings and cash flows.
The dividend yield here is 2.90%. Morgan Stanley has set a $522 price objective. The consensus target is lower at $459.79, and Lockheed Martin stock closed on Friday at $386.29.
Molson Coors Brewing
This iconic American beer company did merge with a Canadian beer giant, but it is still based in Denver. Molson Coors Beverage Co. (NYSE: TAP) is one of the world’s largest brewers (more than a 3% global share) with core brands Coors Light, Miller Lite, Carling, Molson Canadian and Staropramen.
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