The Aerospace Systems segment designs, develops, integrates and produces manned aircraft, unmanned systems, spacecraft, high-energy laser systems, microelectronics and other systems and subsystems.
The Information Systems segment offers advanced solutions for the Defense Department, national intelligence and federal civilian, state, international and commercial customers. It provides products and services primarily in the fields of command and control, communications, cyber, air and missile defense, intelligence processing, civil security, health information technology, and government support systems.
The Technical Services segment provides logistics, modernization and sustainment services, as well as other advanced technology and engineering services, including space, missile defense, nuclear security, training and simulation services.
Investors receive a 1.58% dividend. The $650 BofA Securities price objective is much higher than the $526.72 consensus target. Northrop Grumman stock closed trading on Tuesday at $448.04.
Raytheon Technologies
This top aerospace and defense idea has a diversified mix of businesses. Raytheon Technologies Corp. (NYSE: RTX) is an industry leader in defense, government electronics, space, information technology and technical services.
With a history of innovation spanning 97 years, Raytheon provides state-of-the-art electronics, mission systems integration, C5I products and services, sensing, effects and mission support for customers in more than 80 countries.
In 2020, United Technologies and Raytheon agreed to merge their businesses to create this new aerospace and defense powerhouse. The two-year-old merger, combined with the spin-off of the Carrier and Otis divisions in 2020, has top analysts across Wall Street expecting free cash flow to step up in a big way this year. Toss in the solid recovery in air travel and improving sentiment that could help drive the commercial aerospace business.
Shareholders receive a 2.23% dividend. Raytheon Technologies stock has a $115 price objective at Morgan Stanley. The consensus target is $108.83, and Raytheon Technologies stock closed at $99.85 on Tuesday.
Despite the strong January rally, we are still in a bear market that has strong potential to trade down an additional 15% from current levels. With the geopolitical situations in various parts of the world very tense and on-the-ground fighting raging in Ukraine, it is a good bet these companies will continue to receive orders from around the world. For now, these defense leaders may be among the safer ideas for the rest of the year and into 2024.
Originally published at 24/7 Wall St.
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