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:

Astronics (NASDAQ:ATRO) is the #1 top defense stock out of 76 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 Astronics (NASDAQ:ATRO) is: Value: C, Growth: A, Momentum: B, Sentiment: C, Safety: C, Financials: B, and AI: C.

Astronics (NASDAQ:ATRO) has a Due Diligence Score of 26, which is -4 points lower than the defense industry average of 30. Although this number is below the industry average, our proven quant model rates ATRO as a "A".

ATRO passed 8 out of 33 due diligence checks and has average fundamentals. Astronics has seen its stock return 67.12% over the past year, overperforming other defense stocks by 34 percentage points.

Astronics has an average 1 year price target of $32.00, a downside of -4.31% from Astronics's current stock price of $33.44.

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

Innovative Solutions & Support (NASDAQ:ISSC) is the #2 top defense stock out of 76 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 Innovative Solutions & Support (NASDAQ:ISSC) is: Value: C, Growth: B, Momentum: A, Sentiment: A, Safety: D, Financials: C, and AI: C.

Innovative Solutions & Support (NASDAQ:ISSC) has a Due Diligence Score of 43, which is 13 points higher than the defense industry average of 30.

ISSC passed 18 out of 38 due diligence checks and has strong fundamentals. Innovative Solutions & Support has seen its stock return 129.44% over the past year, overperforming other defense stocks by 96 percentage points.

Optex Systems Holdings (NASDAQ:OPXS) is the #3 top defense stock out of 76 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 Optex Systems Holdings (NASDAQ:OPXS) is: Value: B, Growth: C, Momentum: B, Sentiment: C, Safety: C, Financials: B, and AI: C.

Optex Systems Holdings (NASDAQ:OPXS) has a Due Diligence Score of 51, which is 21 points higher than the defense industry average of 30.

OPXS passed 16 out of 33 due diligence checks and has strong fundamentals. Optex Systems Holdings has seen its stock return 61.83% over the past year, overperforming other defense stocks by 28 percentage points.

Out of 22 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%, which is 4 percentage points higher than the defense industry average of 1.39%.

Transdigm Group's dividend payout ratio of 253.1% 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 4.5%, which is 3 percentage points higher than the defense industry average of 1.39%. 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 173.3% indicates that its high dividend yield might not be sustainable for the long-term.

Park Aerospace (NYSE:PKE) has an annual dividend yield of 2.59%, which is 1 percentage points higher than the defense industry average of 1.39%. 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 174.1% indicates that its dividend yield might not be sustainable for the long-term.

Defense stocks were up 1.08% in the last day, and up 3.9% over the last week. Kratos Defense & Security Solutions was the among the top gainers in the aerospace & defense industry, gaining 10.91% yesterday.

Kratos Defense & Security shares are trading higher after Truist Securities raised its price target on the stock from $38 to $52.

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:

V2x (NYSE:VVX) 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.

V2x has a valuation score of 57, which is 39 points higher than the defense industry average of 18. It passed 4 out of 7 valuation due diligence checks.

V2x's stock has gained 1.75% in the past year. It has underperformed other stocks in the defense industry by -32 percentage points.

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

Textron has a valuation score of 57, which is 39 points higher than the defense industry average of 18. It passed 4 out of 7 valuation due diligence checks.

Textron's stock has dropped -6.95% in the past year. It has underperformed other stocks in the defense industry by -41 percentage points.

Sturm Ruger & Co (NYSE:RGR) is the third most undervalued defense stock based on its Valuation Rating of B. Valuation is one of 7 Component Grades used to calculate the overall Zen Rating.

Sturm Ruger & Co has a valuation score of 43, which is 25 points higher than the defense industry average of 18. It passed 3 out of 7 valuation due diligence checks.

Sturm Ruger & Co's stock has dropped -14.62% in the past year. It has underperformed other stocks in the defense industry by -48 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 1.1% over the next year.

8.82% of defense stocks have a Zen Rating of A (Strong Buy), 20.59% of defense stocks are rated B (Buy), 45.59% are rated C (Hold), 22.06% are rated D (Sell), and 2.94% are rated F (Strong Sell).