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Best Defense Stocks to Buy Now (2023)

Top defense stocks in 2023 ranked by overall Zen Score. See the best defense stocks to buy now, according to analyst forecasts for the aerospace & defense industry.

According to Zen Score, the 3 best defense stocks to buy right now are:

Coda Octopus Group (NASDAQ:CODA) is the top defense stock with a Zen Score of 55, which is 26 points higher than the defense industry average of 29. It passed 17 out of 33 due diligence checks and has strong fundamentals. Coda Octopus Group has seen its stock return 19.49% over the past year, overperforming other defense stocks by 11 percentage points.

Coda Octopus Group has an average 1 year price target of $10.00, an upside of 64.74% from Coda Octopus Group's current stock price of $6.07.

Coda Octopus Group stock has a consensus Strong Buy recommendation according to Wall Street analysts. Of the 1 analyst covering Coda Octopus Group, 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.

Northrop Grumman (NYSE:NOC) is the second best defense stock with a Zen Score of 54, which is 25 points higher than the defense industry average of 29. It passed 20 out of 38 due diligence checks and has strong fundamentals. Northrop Grumman has seen its stock lose -14.41% over the past year, underperforming other defense stocks by -23 percentage points.

Northrop Grumman has an average 1 year price target of $497.00, an upside of 16.97% from Northrop Grumman's current stock price of $424.90.

Northrop Grumman stock has a consensus Buy recommendation according to Wall Street analysts. Of the 5 analysts covering Northrop Grumman, 20% have issued a Strong Buy rating, 20% have issued a Buy, 60% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Huntington Ingalls Industries (NYSE:HII) is the third best defense stock with a Zen Score of 52, which is 23 points higher than the defense industry average of 29. It passed 19 out of 38 due diligence checks and has strong fundamentals. Huntington Ingalls Industries has seen its stock lose -14.62% over the past year, underperforming other defense stocks by -23 percentage points.

Out of 24 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 N/A, which is N/A percentage points lower than the defense industry average of 2.55%.

Transdigm Group's dividend payout ratio of 98.7% indicates that its dividend yield might not be sustainable for the long-term.

Spirit Aerosystems Holdings (NYSE:SPR) has an annual dividend yield of N/A, which is N/A percentage points lower than the defense industry average of 2.55%. Spirit Aerosystems Holdings's dividend payout is not stable, having dropped more than 10% one times in the last 10 years. Spirit Aerosystems Holdings's dividend has not shown consistent growth over the last 10 years.

Spirit Aerosystems Holdings's dividend payout ratio of -0.1% indicates that its dividend yield might not be sustainable for the long-term.

Sturm Ruger & Co (NYSE:RGR) has an annual dividend yield of 12.69%, which is 10 percentage points higher than the defense industry average of 2.55%. Sturm Ruger & Co's dividend payout is not stable, having dropped more than 10% fourteen times in the last 10 years. Sturm Ruger & Co's dividend has not shown consistent growth over the last 10 years.

Sturm Ruger & Co's dividend payout ratio of 172.8% indicates that its high dividend yield might not be sustainable for the long-term.

Defense stocks were down -0.67% in the last day, and down -2.3% over the last week.

We couldn't find a catalyst for why defense stocks are down.

Based on WallStreetZen's Valuation Score, the 3 most undervalued defense stocks right now are:

Coda Octopus Group (NASDAQ:CODA) is the most undervalued defense stock based on WallStreetZen's Valuation Score. Coda Octopus Group has a valuation score of 71, which is 53 points higher than the defense industry average of 18. It passed 5 out of 7 valuation due diligence checks.

Coda Octopus Group's stock has gained 19.49% in the past year. It has overperformed other stocks in the defense industry by 11 percentage points.

Leonardo Drs (NASDAQ:DRS) is the second most undervalued defense stock based on WallStreetZen's Valuation Score. Leonardo Drs has a valuation score of 71, which is 53 points higher than the defense industry average of 18. It passed 5 out of 7 valuation due diligence checks.

Cpi Aerostructures (NYSEMKT:CVU) is the third most undervalued defense stock based on WallStreetZen's Valuation Score. Cpi Aerostructures 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.

Cpi Aerostructures's stock has gained 222% in the past year. It has overperformed other stocks in the defense industry by 213 percentage points.