Thursday, May 13, 2021

Advantages of investing in the Defense Industry

In the United States exist some of biggest defense companies and the top 5 in United States currently would be Boeing, Raytheon, Lockheed Martin, Northrop Grumman, and General Dynamics. These defense companies are known for the following: Boeing is famously known as an aerospace company, Raytheon Company researches and develops technology and weapons for the defense industry, Lockheed Martin is also an aerospace and security company, Northrop Grumman focuses on spacecraft and aircraft, and General Dynamics is a defense and also an aerospace company. These are the current market value in billions for these companies. Boeing currently stands at $130.27 billion, Raytheon Company at $126.72 billion, Lockheed Martin at $ 107.85 billion, Northrop Grumman at $59.51 billion and General Dynamics at $53.80 billion.

Some of advantages of investing in defense companies may include things like the products having a long life cycle, funding troops at home or overseas and also operations for protecting the country and also funding for research and development. More funding means more impressive cutting edge tech for department of defense especially in geopolitics and high barriers to protect profits, government contracts et cetera. Another important advantage of investing in the defense sector is that defense stocks tend to not get too affected during a recession. 

During the pandemic COVID could have had an effect on defense spending since there was technically a recession caused by the pandemic so it is very easy for people to believe there may be defense budget cuts, but history has shown that recessions do not get too affected by economic crisis.


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