RTX - 2 Defense Stocks That Could Rocket Higher
Aerospace and defense giant Raytheon Technologies (NYSE: RTX) and $1.7 billion-market-cap aerospace and defense welterweight AAR Corp (NYSE: AIR) are two companies at different ends of their sector's spectrum. Nevertheless, they are both attractive stocks trading at reasonable valuations with plenty of growth prospects. So here's a look at why both stocks are worth buying.
First up, both companies are good ways to play the ongoing recovery in commercial aerospace, and have been previously discussed in that context. However, it's time to focus on their defense businesses, which are both significant. For example, Raytheon's defense-focused segments, Raytheon Missiles & Defense (RMD) and Raytheon Intelligence & Space (RIS), generated almost 48% of Raytheon's sales in 2021. Meanwhile, AAR's government (primarily defense) business was responsible for 51% of the company's fiscal 2021 sales.
As a major supplier of aircraft engines and parts (Pratt & Whitney) and a wide range of aerospace components (Collins Aerospace), Raytheon is well set to participate in the multi-year recovery in commercial aerospace. Indeed, commercial aviation will drive the near-term improvement of the company.
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2 Defense Stocks That Could Rocket Higher