With the risks of wars increasing, defense contractors are appealing investments. RTX Corporation (RTX) is a top stock to buy.
On October 25, 2024, the firm secured a $900 million contract modification from the U.S. Missile Defense Agency. It will support the X-band Radar and Control Model 2 radar systems.
Despite dipping recently, Lockheed Martin (LMT) is equally appealing. LMT stock peaked at $618 last month but lost 8.8% last week. In the last quarter, the firm posted sales rising by 1.0% to $17.1 billion. Its EPS was $6.80, or $1.6 billion in earnings. The backlog climbed to a record high.
Cautious investors should pick up a few more LMT stock whenever it dips. Revenue will rebound, which increases its free cash flow and lifts its long-term dividend payout.
Verizon (VZ) peaked at over $45 recently. Markets are worried that its EBITDA growth will slow in 2025. In addition, free cash flow growth may slow. Verizon’s purchase of Frontier will add modest risks to the company. Still, the company may manage its higher debt by raising subscription rates, if needed.
VZ stock is a hold at current levels. If it falls below $40, value investors will get a bigger discount while collecting a dividend that yields nearly 6.5%.