Baird expects General Dynamics to modestly beat earnings expectations and raise guidance. The firm also expects solid numbers from the Gulfstream jet division.

Investors receive a 2.48% dividend. The Baird price target for the shares is $243, and the Wall Street consensus target is just $199.94. General Dynamics stock closed on Wednesday at $191.63 per share.

Lockheed Martin

This is one of the top aerospace and defense stocks to buy, and many on Wall Street are expecting a very solid continuation of U.S. and foreign defense spending. Lockheed Martin Corp. (NYSE: LMT) researches, designs, develops, manufactures, integrates, operates and sustains advanced technology systems, products and services. It also provides a wide range of defense electronics products and IT services.

Being the Pentagon’s prime contractor, Lockheed Martin offers a diverse portfolio of global aerospace, defense, security and advanced technologies. Its leveraged presence in the Army, Air Force, Navy and IT programs guarantees a steady inflow of follow-on orders, not only from the U.S. government but also from many foreign allies of the nation.

Baird expects the company to beat earnings expectations and increase 2021 guidance to go along with very solid cash flow numbers for 2021 to 2023.

Lockheed Martin stock investors receive a 2.73% dividend. Baird has a $394 price target, and the consensus target is up at $427.72. The shares closed at $380.89 on Wednesday.

Raytheon Technologies

This stock has rallied smartly this year off of 52-week lows but still offers perhaps the best value in the sector. 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 2019, United Technologies and Raytheon agreed to merge their businesses to create a new aerospace and defense powerhouse. The two companies received unanimous approval from their respective boards, and the merger is finally complete, with the new company now called Raytheon Technologies.