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:

Sturm Ruger & Co (NYSE:RGR) 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 Sturm Ruger & Co (NYSE:RGR) is: Value: B, Growth: C, Momentum: C, Sentiment: C, Safety: B, Financials: B, and AI: B.

Sturm Ruger & Co (NYSE:RGR) has a Due Diligence Score of 38, which is 7 points higher than the defense industry average of 31.

RGR passed 13 out of 38 due diligence checks and has average fundamentals. Sturm Ruger & Co has seen its stock lose -16.6% over the past year, underperforming other defense stocks by -30 percentage points.

Cae (NYSE:CAE) 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 Cae (NYSE:CAE) is: Value: C, Growth: A, Momentum: B, Sentiment: B, Safety: B, Financials: C, and AI: C.

Cae (NYSE:CAE) has a Due Diligence Score of 11, which is -20 points lower than the defense industry average of 31. Although this number is below the industry average, our proven quant model rates CAE as a "A".

CAE passed 4 out of 38 due diligence checks and has weak fundamentals. Cae has seen its stock return 25.08% over the past year, overperforming other defense stocks by 12 percentage points.

Cae has an average 1 year price target of $37.50, an upside of 61.71% from Cae's current stock price of $23.19.

Cae stock has a consensus Strong Buy recommendation according to Wall Street analysts. Of the 2 analysts covering Cae, 50% have issued a Strong Buy rating, 50% have issued a Buy, 0% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Tat Technologies (NASDAQ:TATT) is the #3 top defense stock out of 74 with a Zen Rating of B. Stocks with a rating of B have had an average return of +19.88% 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: C.

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 142.62% over the past year, overperforming other defense stocks by 129 percentage points.

Tat Technologies has an average 1 year price target of $35.00, an upside of 26.77% from Tat Technologies's current stock price of $27.61.

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.

Out of 19 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 5.74%, which is 4 percentage points higher than the defense industry average of 1.4%.

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 4.12%, which is 3 percentage points higher than the defense industry average of 1.4%. 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 dividend yield is sustainable for the long-term.

Park Aerospace (NYSE:PKE) has an annual dividend yield of 2.92%, which is 2 percentage points higher than the defense industry average of 1.4%. 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 down -2.5% in the last day, and down -3.07% over the last week. Boeing Co was the among the top losers in the aerospace & defense industry, dropping -1.58% yesterday.

Boeing shares are trading higher after the company announced it will sell portions of its Digital Aviation Solutions business to Thoma Bravo for $10.55 billion in an all-cash transaction.

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 22 points higher than the defense industry average of 21. It passed 3 out of 7 valuation due diligence checks.

Cpi Aerostructures's stock has gained 19.49% in the past year. It has overperformed other stocks in the defense industry by 6 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 43, which is 22 points higher than the defense industry average of 21. It passed 3 out of 7 valuation due diligence checks.

V2x's stock has dropped -3.54% in the past year. It has underperformed other stocks in the defense industry by -17 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 36 points higher than the defense industry average of 21. It passed 4 out of 7 valuation due diligence checks.

Textron's stock has dropped -31.13% in the past year. It has underperformed other stocks in the defense industry by -44 percentage points.

57.69% of defense stocks rated by analysts are a strong buy right now. On average, analysts expect defense stocks to rise by 18.09% over the next year.

3.17% of defense stocks have a Zen Rating of A (Strong Buy), 23.81% of defense stocks are rated B (Buy), 46.03% are rated C (Hold), 17.46% are rated D (Sell), and 9.52% are rated F (Strong Sell).