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2024-07-11 09:30:33 ET

Summary

• NATO is increasingly preparing for a multi-theater threat scenario, with a growing consensus on China's threat to European security.
• RTX Corporation, a premier defense contractor, is well-positioned for growth with a diversified portfolio in defense and commercial aerospace.
• Strong financials, robust R&D investments, and aggressive buybacks make RTX Corporation a top pick for dividend-growth investors with a potential upside to $140 per share.

Introduction

Global tensions are rising.

A few hours before I started working on this article, NATO came out (for the first time ever), making the case that China enabled the war in Ukraine by supporting Russia.

One of the biggest takeaways here is that NATO is increasingly preparing for a multi-theater threat scenario, requiring significant investments in defense modernization.

The push from NATO shows a growing consensus between the US and its partners that Beijing represents a threat not just in Asia, but also to European security through its support for Russia. In recent years, European capitals from Berlin to London, Prague and Vilnius have hardened their stance on China.

Bloomberg also reported in April that Beijing was providing Russia with satellite imagery for military purposes, microelectronics and machine tools for tanks, as well as a swath of technologies used in weapons or needed to produce them. - Bloomberg .

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