Sectors & IndustriesIndustrialsAerospace & Defense

Best Defense Stocks to Buy Now (2025)

Top defense stocks in 2025 ranked by overall Zen Rating. "A" Rated stocks have returned an average of +32.52% per year, and are the best defense stocks to buy now. Learn More.

According to Zen Ratings, our proprietary rating system that evaluates 115 factors proven to drive growth in stocks and assigns each stock in our system an overall letter grade as well as 7 individual Component Grades for Value, Growth, Momentum, Sentiment, Safety, Financials, and proprietary AI algorithms, the 3 best defense stocks to buy right now are:

Tat Technologies (NASDAQ:TATT) is the #1 top defense stock out of 74 with a Zen Rating of A. Stocks with a rating of A have had an average return of +32.52% per year. Learn more.

The Component Grade breakdown for Tat Technologies (NASDAQ:TATT) is: Value: C, Growth: B, Momentum: A, Sentiment: B, Safety: C, Financials: C, and AI: B.

Tat Technologies (NASDAQ:TATT) has a Due Diligence Score of 39, which is 8 points higher than the defense industry average of 31.

TATT passed 16 out of 38 due diligence checks and has average fundamentals. Tat Technologies has seen its stock return 138.45% over the past year, overperforming other defense stocks by 123 percentage points.

Tat Technologies has an average 1 year price target of $35.00, an upside of 19.82% from Tat Technologies's current stock price of $29.21.

Tat Technologies stock has a consensus Strong Buy recommendation according to Wall Street analysts. Of the 1 analyst covering Tat Technologies, 100% have issued a Strong Buy rating, 0% have issued a Buy, 0% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Elbit Systems (NASDAQ:ESLT) is the #2 top defense stock out of 74 with a Zen Rating of A. Stocks with a rating of A have had an average return of +32.52% per year. Learn more.

The Component Grade breakdown for Elbit Systems (NASDAQ:ESLT) is: Value: C, Growth: A, Momentum: A, Sentiment: B, Safety: A, Financials: C, and AI: A.

Elbit Systems (NASDAQ:ESLT) has a Due Diligence Score of 44, which is 13 points higher than the defense industry average of 31.

ESLT passed 17 out of 38 due diligence checks and has strong fundamentals. Elbit Systems has seen its stock return 103.12% over the past year, overperforming other defense stocks by 88 percentage points.

Textron (NYSE:TXT) is the #3 top defense stock out of 74 with a Zen Rating of A. Stocks with a rating of A have had an average return of +32.52% per year. Learn more.

The Component Grade breakdown for Textron (NYSE:TXT) is: Value: A, Growth: C, Momentum: C, Sentiment: C, Safety: A, Financials: C, and AI: B.

Textron (NYSE:TXT) has a Due Diligence Score of 43, which is 12 points higher than the defense industry average of 31.

TXT passed 16 out of 38 due diligence checks and has strong fundamentals. Textron has seen its stock lose -17.11% over the past year, underperforming other defense stocks by -33 percentage points.

Textron has an average 1 year price target of $86.38, an upside of 22.92% from Textron's current stock price of $70.27.

Textron stock has a consensus Buy recommendation according to Wall Street analysts. Of the 8 analysts covering Textron, 37.5% have issued a Strong Buy rating, 12.5% have issued a Buy, 37.5% have issued a hold, while 0% have issued a Sell rating, and 12.5% have issued a Strong Sell.

Out of 20 defense stocks that have issued dividends in the past year, the 3 defense stocks with the highest dividend yields are:

Transdigm Group (NYSE:TDG) has an annual dividend yield of 5.23%, which is 4 percentage points higher than the defense industry average of 1.36%.

Transdigm Group's dividend payout ratio of 264.5% indicates that its high dividend yield might not be sustainable for the long-term.

Smith & Wesson Brands (NASDAQ:SWBI) has an annual dividend yield of 4.23%, which is 3 percentage points higher than the defense industry average of 1.36%. Smith & Wesson Brands's dividend payout is stable, having never dropped by more than 10% in the last 10 years. Smith & Wesson Brands's dividend has shown consistent growth over the last 10 years.

Smith & Wesson Brands's dividend payout ratio of 78.5% indicates that its high dividend yield is sustainable for the long-term.

Park Aerospace (NYSE:PKE) has an annual dividend yield of 2.91%, which is 2 percentage points higher than the defense industry average of 1.36%. Park Aerospace's dividend payout is not stable, having dropped more than 10% two times in the last 10 years. Park Aerospace's dividend has shown consistent growth over the last 10 years.

Park Aerospace's dividend payout ratio of 138.9% indicates that its dividend yield might not be sustainable for the long-term.

Defense stocks were up 1.06% in the last day, and up 3.84% over the last week. Leonardo Drs was the among the top gainers in the aerospace & defense industry, gaining 8.85% yesterday.

Leonardo shares are trading higher after the company reported better-than-expected Q1 financial results.

Based on the Valuation rating, one of the 7 components of a stocks overall Zen Ratings grade, which evaluates factors including estimated earnings yield, earnings before interest and taxes/enterprise value, cash flow yield, free cash flow to price, and price-to-earnings growth (PEG ratio), the 3 most undervalued defense stocks right now are:

Cpi Aerostructures (NYSEMKT:CVU) is the most undervalued defense stock based on its Valuation Rating of A. Valuation is one of 7 Component Grades used to calculate the overall Zen Rating.

Cpi Aerostructures has a valuation score of 43, which is 23 points higher than the defense industry average of 20. It passed 3 out of 7 valuation due diligence checks.

Cpi Aerostructures's stock has gained 25.38% in the past year. It has overperformed other stocks in the defense industry by 10 percentage points.

V2x (NYSE:VVX) is the second most undervalued defense stock based on its Valuation Rating of A. Valuation is one of 7 Component Grades used to calculate the overall Zen Rating.

V2x has a valuation score of 29, which is 9 points higher than the defense industry average of 20. It passed 2 out of 7 valuation due diligence checks.

V2x's stock has dropped -0.58% in the past year. It has underperformed other stocks in the defense industry by -16 percentage points.

Textron (NYSE:TXT) is the third most undervalued defense stock based on its Valuation Rating of A. Valuation is one of 7 Component Grades used to calculate the overall Zen Rating.

Textron has a valuation score of 57, which is 37 points higher than the defense industry average of 20. It passed 4 out of 7 valuation due diligence checks.

Textron's stock has dropped -17.11% in the past year. It has underperformed other stocks in the defense industry by -33 percentage points.

56.6% of defense stocks rated by analysts are a strong buy right now. On average, analysts expect defense stocks to rise by 9.55% over the next year.

4.76% of defense stocks have a Zen Rating of A (Strong Buy), 25.4% of defense stocks are rated B (Buy), 44.44% are rated C (Hold), 17.46% are rated D (Sell), and 7.94% are rated F (Strong Sell).