7 Stocks That Benefit From War

Russia’s invasion of Ukraine is unquestionably having major impacts on the economy of the world. But for some companies, war is an opportunity to boost revenues and profits. Here are 7 stocks that benefit from war.

Northrop Grumman Corporation (NOC)

Northrop Grumann Corporation is a military, defense, and aerospace manufacturer and contractor, one with billions in revenue and a healthy balance before the war in Ukraine broke out. In 2021, net income, diluted EPS, net profit margin, and operating income all grew.

Since the start of the war in Ukraine, NOC share price has spiked higher to the tune of over 15%, far outpacing the general stock market.

Northrop produces a slew of aircraft that may be useful in an armed conflict. This includes the F-35 and B-21 stealth bombers. All of these aircraft may be in high demand, particularly given the rise in the need for air defenses in Ukraine.

Northrop is also involved in nuclear weapons and is expected to support the replacement of nuclear ballistic missiles in the future. Hostilities with Russia would seem to give the company a greater opportunity to boost profits over the coming months and years.

Lockheed Martin Corporation (LMT)

Lockheed Martin is involved in the production of a variety of military fighter jets, including the F-35. It sells this aircraft to countries across the world, including the United States. It has shown slow and steady growth over the past year. And like Northrop stock, LMT risen fast when war broke out.
 
The positive sentiment for the stock is reflected in its composite analysts’ ratings, which are overweight (7 buy, 1 overweight, 12 hold). 
It is the F-35 that has helped to drive the price of Lockheed Martin up even further of late. Germany recently announced that it would be purchasing more airplanes as part of their efforts to build up their air force.
 
Other countries in Europe – such as Poland – are signing contracts to purchase more military airplanes too. Heightened demand should create additional opportunities for Lockheed Martin to expand its business. 
 

Barrick Gold Corporation (GOLD)

Barrick has proven popular with Hedge funds lately, and with good reason; gold is a safe haven when confidence in governments falls. 

Like other stocks on this list, Barrick has seen a healthy increase in share price since the start of activities in Ukraine and the company’s fundamentals also remain sound; it is largely debt-free. Management has reported quarterly increases in its revenue, net income, EPS, and net profit margin.

Another tailwind is a significant stock buyback announced after its last quarter earnings, which beat projections. 

Of the 23 analysts who rate the stock, 10 rate it as a Buy.

The Boeing Company (BA)

Most people are familiar with the Boeing Company for its construction of commercial airplanes however Boeing also has an extensive military division. The company manufactures fighter planes, helicopters, and related technology.

Ongoing hostilities in Russia – and the threat of those hostilities spreading wider – have resulted in increased demand for Boeing’s products. This, in turn, is expected to increase Boeing’s bottom line. As a result, analysts rate the stock highly: 16 have it as Buy, 4 Overweight, 5 Hold, and 2 Sell.

Boeing’s stock has taken a hit in recent years due to worries over commercial aviation, but the stock is still believed by many to have more upside than downside with ongoing conflicts. 

Raytheon Technologies Corporation (RTX)

Raytheon Technologies is a research, science, and defense business. As a defense contractor, the company is well-positioned to take advantage of increases in military spending. The evidence of capital flows towards Raytheon are seen in RTX share price, which has been on the march since the Russian invasion.

Compared to the previous quarter, Raytheon is performing very well by showing increases in most financial metrics: net income increased by 408%, EPS 400%, net profit margin 390%, and operating income 207%.

As you might expect, analysts are bullish with an average rating of Overweight: 14 Buy, 3 Overweight, and 6 Hold.

Raytheon works closely with other defense contractors, creating opportunities for collaboration. The company has all of the right ingredients to be successful in times of conflict.

Exxon Mobil Corporation (XOM)

Oil is typically a solid sector to invest in during times of conflict, as the need for oil will expand however, firms have to be well-positioned to take advantage of these increased demand pressures.

Exxon is one of those firms, as it may be able to make up the slack caused by sanctions against the purchase of Russian oil. 

Exxon share price has enjoyed a big increase since the start of hostilities in Ukraine. The company’s financials are trending the same direction, up. This has not only put the company in a solid position to do well in the short-term, but earned it solid ratings from stock analysts, and improved ratings at that. Three months ago, the stock had ratings of 10 Buy, 2 Overweight, 17 Hold, and 3 Sell. Today, those numbers have improved: 11 Buy, 2 Overweight, 18 Hold, and 1 Sell. This has moved its consensus rating from Hold to Overweight.

General Dynamics (GD)

General Dynamics is another massive defensive and aerospace organization. The company has over 100,000 employees and is invested in a range of military and combat applications. Its relatively diverse military holdings give it a broader base than some of the other defense stocks on this list. 

The stock continues to outperform the market and Its fundamentals also remain strong. The analyst consensus on the stock is Overweight, with 11 rating it a Buy, 2 Overweight, 6 Hold, and 1 Underweight.

A tailwind is the company’s increasing dividend – GD board voted to increase the company’s dividend by 5.9%. This is the 25th year in a row that the company has raised its dividend. All of this has led to increasing price targets for the stock.

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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.