Aerospace & Defense

Why Dividend-Paying Aerospace and Defense Stocks Should Be Bought Now

L3 Harris Technologies

After its 2019 merger, this is now the sixth-largest defense company. L3 Harris Technologies Inc. (NYSE: LHX) is an agile global aerospace and defense technology innovator engaged in the provision of defense and commercial technologies across air, land, sea, space and cyber domains.

Its Integrated Mission Systems segment includes intelligence, surveillance and reconnaissance; advanced electro optical and infrared; and maritime power and navigation. The Space and Airborne Systems segment comprises space payloads, sensors and full-mission solutions; classified intelligence and cyber defense; avionics; and electronic warfare.

Top Wall Street analysts have felt for some time that the company is situated well in the high growth buckets of the Defense Department budget, and many believe the business is not as short-cycle as the market historically has perceived. Merger synergies give the business a unique path to cash flow and margin upside, along with above-average revenue growth.

Shareholders receive a 1.71% dividend. The BofA Securities price target is $292, which would be an all-time high. L3 Harris Technologies stock closed on Monday at $238.78.

Northrop Grumman

This was ranked as one of the top five defense contractors by sales last year. Northrop Grumman Corp. (NYSE: NOC) provides innovative systems, products and solutions in unmanned systems, cyber, C4ISR and logistics and modernization to government and commercial customers worldwide. It also has one of America’s highest-paid CEOs.

The Aerospace Systems segment designs, develops, integrates and produces manned aircraft, unmanned systems, spacecraft, high-energy laser systems, microelectronics and other systems and subsystems.

The Information Systems segment offers advanced solutions for the Department of Defense, national intelligence and federal civilian, state, international and commercial customers. It provides products and services primarily in the fields of command and control, communications, cyber, air and missile defense, intelligence processing, civil security, health information technology, and government support systems.

The Technical Services segment provides logistics, modernization and sustainment services, as well as other advanced technology and engineering services, including space, missile defense, nuclear security, training and simulation services.

Northrop Grumman stock comes with a 1.60% dividend. The BofA Securities price target is $460. The consensus target is $409.83, and shares closed on Monday at $393.89.


These top companies will be reporting earnings near the end of the month or in early November, giving investors a chance to buy in front of what many across Wall Street feel could be an outstanding quarter. In this overbought and expensive market, all four still offer compelling value.

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