Rising geopolitical tensions and bipartisan support for a big increase in the fiscal 2022 U.S. defense budget should benefit prominent aerospace and defense players Raytheon (NYSE:RTN) (RTX) and General Dynamics (GD). But which of these stocks is a better buy now? Let’s find out.Waltham, Mass.-based Raytheon Technologies Corporation (NYSE:RTX) and General Dynamics Corporation (NYSE:GD) in Falls Church, Va., are two well-established companies in the U.S. aerospace and defense industry. RTX provides advanced systems and services for commercial, military, and government customers worldwide. It operates through four segments—Collins Aerospace Systems; Pratt & Whitney; Raytheon Intelligence & Space; and Raytheon Missiles & Defense. GD offers a broad portfolio of products and services in business aviation, combat vehicles, weapons systems, munitions, shipbuilding design and construction, information systems, and technologies.
Rising geopolitical tensions related to the collapse of the government in Afghanistan might work favorably for the aerospace and defense industry. In addition, because Pentagon leaders are requesting additional funding in the fiscal 2022 defense budget, the industry could benefit. The U.S. aerospace and defense market is projected to grow at a 2.4% CAGR to $550.78 billion by 2030. So, both RTX and GD should benefit.
While RTX has delivered 19.9% returns year-to-date, GD has surged 33.9% in price. In terms of their past month’s performance, GD is a clear winner with 3.9% gains versus RTX’s negative returns. But, which of these stocks is a better pick now? Let’s find out.