The defense industry has been unshakable during the COVID-19 pandemic. Amid rising geopolitical tensions around, spending on evolving warfare technologies has driven revenue increases for U.S. defense contractors. Hence, we expect leading defense stocks Lockheed Martin (LMT) and Raytheon Technologies (NYSE:RTX) to deliver solid returns in the coming months. But let’s find out which of these stocks is a better buy now.Raytheon (NYSE:RTN) Technologies Corporation (RTX) and Lockheed Martin Corporation. (NYSE:LMT) are two of the world’s leading aerospace and defense companies. RTX operates through four segments—Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense. LMT operates through Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space.
Because most countries are committed to sustaining their military capabilities, defense spending is likely to remain stable this year. Despite the coronavirus pandemic’s economic impact, as geopolitical tensions continue most countries are expected to spend significantly on strengthening their defenses. As two of the world’s largest defense technology companies, we think LMT and RTX have the potential to capitalize on this trend and generate substantial returns this year and beyond.
RTX has gained 21.7% over the past year, while LMT has returned 4.5% over the same period. In terms of their past month’s performance, LMT is the clear winner with 14% gains versus RTX’s 0.3%. But which of these stocks is a better pick now? Let’s find out.