Despite lingering pandemic blues, the defense industry is gradually regaining investors’ interest due to increasing investments and favorable Presidential administrative policies. Therefore, we think it could be wise to bet on quality defense stocks Raytheon Technologies (NYSE:RTX), Northrop Grumman (NOC), General Dynamics (GD), and L3Harris Technologies (NYSE:LHX). They are each currently trading below their 52-week highs. So, let’s pore over these names.The defense industry was severely hit by pandemic-related business disruptions and has yet to recover completely. However, it remains a safe haven for investors, with most defense-oriented companies steadily improving their financials. Furthermore, the fiscal 2022 National Defense Authorization Act aims to strengthen the existing “Buy American” policy, which plans to build a domestic workforce capable of supporting the USA’s national security-industrial base, thereby improving the network of defense trade relationships between America and its allies.
According to a Grand View Research report, the global aerospace and defense MRO market is expected to grow at a 14% CAGR from 2021 - 2028. Also, investors’ rising interest in aerospace and defense stocks is evident in the iShares U.S. Aerospace & Defense ETF’s (ITA) 12.5% year-to-date returns.
So, we think it could be wise to bet on fundamentally sound defense stocks Raytheon (NYSE:RTN) Technologies Corporation (RTX), Northrop Grumman Corporation (NYSE:NOC), General Dynamics Corporation (NYSE:GD), and L3Harris Technologies, Inc. (LHX), which are now trading below their 52-week highs.