With government bond yields in many major economies rising, investors are paying closer attention to companies tied to national security and long term defense commitments. That backdrop keeps interest on businesses that build aircraft, satellites and military systems, as well as those that support them with critical services. This article walks through three stocks from the US aerospace and defense space so you can decide whether any deserve a place on your watchlist.
The three aerospace and defense stocks covered below are just a starting sample. The full screen surfaced 73 more companies with equally compelling narratives that are not included in this article. If you want to go broader and identify your own high conviction ideas in the sector, head straight to the Aerospace And Defense screener .
Redwire (RDW)
Overview:Redwire is a space infrastructure company that supplies spacecraft hardware and mission services such as star trackers, sun sensors, antennas, space situational awareness payloads and in space manufacturing facilities to government and commercial space programs. These systems support navigation, communications and intelligence missions for defense and civil space customers. Additional offerings in software, microgravity payloads and uncrewed systems broaden its reach beyond pure defense work.
Operations:Redwire generates roughly US$208.9 million of revenue from its Space segment and US$217.4 million from Defense Tech, with sales spread across the U.S., Europe and other regions.
Market Cap:US$2.66b
Redwire provides direct exposure to demand for space hardware that underpins modern defense, from star trackers and infrared payloads to uncrewed systems and antennas used in navigation, ISR and secure communications. Recent contracts with Space Systems Command, NATO allies and the US$981 million award linked to defense space infrastructure sit alongside commercial work such as SpaceMD's SpaceX Starfall mission, contributing to a backlog tied to long duration programs. At the same time, Redwire is still loss making, has relied on external funding and share issuance, and has taken on complex fixed price projects and acquisitions that can pressure margins. The company's ability to convert backlog, manage cash discipline and develop higher margin offerings such as in space manufacturing remains a key consideration for investors.
Redwire's backlog and mission contracts hint at a much bigger story that many investors may be overlooking. Get the full picture on cash discipline, program risk and upside scenarios in the analysis report for Redwire .
General Electric (GE)
Overview:General Electric, now focused as GE Aerospace, designs and services jet engines, power systems and key aircraft components for commercial airlines, business jets and military customers, giving investors direct exposure to the engines that power much of global aviation and a wide range of defense aircraft and missiles. Its Commercial Engines & Services arm is complemented by the Defense & Propulsion Technologies segment, which supplies engines, avionics, power and mission critical hardware for government and defense programs worldwide.
Operations:GE Aerospace generates about US$37.7b of revenue from Commercial Engines & Services, US$11.5b from Defense & Propulsion Technologies and US$1.4b from Corporate & Other activities.
Market Cap:US$348.3b
Investors looking at aerospace and defense may find GE Aerospace hard to ignore because its engines and services are tied directly to aircraft utilization, long running defense platforms and a large installed base that feeds recurring MRO and spare parts revenue. A growing backlog in Defense & Propulsion, fresh contracts like the US$2.87b Navy deal for F414 engines and work on hypersonic and missile propulsion extend that visibility, while digital tools and AI in maintenance aim to protect margins even as supply chain issues and cost inflation create pressure. The stock carries high leverage and a premium valuation, so the key question is whether that engine and defense services franchise can justify those expectations over time.
GE Aerospace's engine and defense backlog keeps growing, yet the real story may be how that premium valuation lines up with expectations. Scan the analyst forecasts for General Electric before the next key contract or margin twist reshapes the picture.
Boeing (BA)
Overview:Boeing is one of the largest aerospace manufacturers in the world, producing commercial jetliners such as the 737 and 787 for airlines, while also supplying military aircraft, missiles, satellites and space systems to defense customers. Its Commercial Airplanes segment is the main driver. Defense, Space & Security and Global Services provide additional exposure to long term defense programs and ongoing support for aircraft already in service.
Operations:Boeing generates about US$43.4b of revenue from Commercial Airplanes, US$29.4b from Defense, Space & Security and US$21.3b from Global Services, with sales spread across the United States, Asia, Europe and the Middle East.
Market Cap:US$164.2b
For investors focused on aerospace and defense, Boeing offers a direct line into global aircraft production and long dated defense programs, backed by a commercial backlog reported at more than US$500b and anchored by core platforms like the 737 and 787. A major F 15 sustainment and modernization contract running through 2037 highlights the depth of its defense pipeline. The growing Global Services arm adds higher margin, recurring work tied to fleet upkeep. At the same time, the Commercial Airplanes division has reported losses, carries heavy debt of US$53.3b and continues to work through production delays and regulatory scrutiny. How Boeing balances that repair job with the potential of its order book is what could matter most for long term returns in this theme.
Boeing's sizable order book and defense pipeline may give the impression that they are obscuring something investors have not fully pieced together yet. Explore the contracts, backlog quality, and debt story with the analysis report for Boeing
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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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