The best offense for investors this year may be a good defense stock
War is good business.
The U.S. has been in a continuous state of war or war readiness since Dec. 7, 1941.
While the war in Afghanistan ended for the U.S. in 2021, the United States is now the largest western supplier for the War in Ukraine, which began in earnest a year ago.
This has been very good for investors in defense stocks. While the Nasdaq is down 14% over the last two years, the biggest defense stocks are up an average of 40%. Most also pay fat dividends.
War may be all hell, as William Tecumseh Sherman wrote. But it is phenomenally profitable. It’s one of the primary reasons America remains the world’s dominant power. America is quite good at it.
Unsurprisingly then, the U.S. is also very good at running defense companies. When government funding lags, defense contractors merge around the latest technologies. When funding rises, the survivors control the resulting market growth.
As an investor, you can do quite well with the usual defense suspects. But the best performer lately doesn’t make weapons at all. Here are the five best defense stocks to buy (with dividends) for February 2023.
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