Among the worldwide aerospace and defense markets, the US controls the largest share of worldwide military outlays and commands over 40% of the global defense spending. This works as a great advantage for many of the US companies operating in the segment and puts them in a strong market position. RTX Corporation (NYSE:RTX) is one such beneficiary.
The company is a global provider of advanced systems and services for commercial, military, and government customers. RTX functions through three primary segments: Collins Aerospace, Pratt & Whitney, and Raytheon.
RTX is ranked among the major players like Lockheed Martin, Northrop Grumman, Boeing, and General Dynamics, which operate in the US aerospace and defense industry.
The recent impressive quarterly financials resulted in a stock rally. The shares rose 8.2% year-to-date and have surged 23% in the past year. RTX’s forward non-GAAP earnings of 20.87x and forward Price/Sales of 1.99x are both trading at a premium compared to the industry medians.
Amid this, is RTX the best growth play right now?
RTX Has a Strong Standing In The Defense Industry
A large part of the future growth of RTX is hinged on the US aerospace and defense industry, which seems quite promising for now.
Last month, RTX’s Raytheon reinstated its partnership with the US Army with the follow-on contract for advanced defense analysis solutions. In the initial arrangement, the company developed large-scale theater scenarios to assess concepts of operations in a multi-domain conflict. Now, in the follow-on contract, Raytheon will establish an ongoing experimentation environment with RCADE.
Also, this year, Raytheon was awarded a $333 million contract from the US Navy for the production of Standard Missile-6 (SM-6) Block IA missiles. The proposed missile supports anti-air, anti-surface warfare, and sea-based terminal ballistic missile defense in one solution.
Another key contract the aerospace & defense company achieved is the potential 10-year, $4.2 billion contract by the US Army awarded to 10 selected companies. Under the contract, companies will supply lighter-than-air systems, tethered platforms, and elevated sensors to the service branch. Other awardees include Advanced Technology Systems, Elevated Technologies, Leidos, Mission Solutions Group, and QinetiQ.
Alongside ongoing growth in commercial air traffic and higher sales volume, RTX’s involvement in innovations and intelligence will drive its growth.
RTX’s Dividend Appeals to Income Investors
RTX has maintained a long record of returning dividends to shareholders. This year, the Board of Directors declared a dividend of $0.63 per share of RTX common stock.
The company currently pays a dividend of $2.52 per share annually, which yields 2.01 percent. RTX has raised its dividend for 31 consecutive years. The dividend has grown at a CAGR of 7.3% and 6.4% over the past three and five years.
Many investors choose stocks based on their ability to pay regular dividends, and RTX checks this box, too. Regular payouts are a testament to the company’s commitment to returning to shareholders.
RTX Revenue Rising
RTX’s first quarter revenue of $20.30 billion reflects an increase of 5% from the prior year’s quarter. The company’s Pratt & Whitney segment sales led the total sales with a 14% growth from the previous period to $7.37 billion.
In the period, RTX saw its adjusted net income grow to $1.99 billion, up 11% from the $1.79 billion during the same quarter in 2024. This translated to adjusted earnings of $1.47 per share against the $1.34 per share in the prior year’s quarter.
Furthermore, RTX was able to persuade free cash flow to take a 360-degree turn. Its free cash flow came in at $792 million in the period, against a negative $125 million in the year before.
Looking forward, the company is projecting adjusted sales of $83 billion to $84 billion for the full year 2025, representing 4% to 6% organic growth. It expects adjusted EPS of $6.00 – $6.15 and free cash flow between $7 billion and $7.5 billion.
Is RTX The Best Growth Stock?
RTX has wide operations in the US aerospace and defense industry, and it offers several appealing factors for investors. As a major manufacturer of aircraft engines, avionics, and aerostructures operating at a global level, RTX is slated to benefit from the growing demand for advanced aerospace systems globally. Its wide range of products and favorable industry tailwinds will allow it to thrive amid economic volatility.
The US Defense Department is working to strengthen its current standings and is investing rigorously in the same direction. RTX has remained a long-standing partner with the department and thus will certainly yield significant benefits.
With all the surrounding positives like robust financials, surging global demands, and advanced innovations, RTX looks like a Buy for investors. Out of 20 analysts covering the stock, 11 labeled RTX as a Buy, and the remaining stated it as a Hold. The median forecast shows that the stock will improve by 11% over the next 12 months.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.