Defense stocks can be rewarding
By Dian Vujovich
I am no fan of war. Nor of profits made from war-related industries. Given that not everyone thinks like me, and, that wars are a reality of the world in which we live, there can be big money made from investing in defense stocks. Here’s a snippet of how three companies have fared over the recent long-term.
Long-term in this case means roughly 11 years.
If you had been a true blue long-term holder of shares of any of these three companies, Lockheed Martin Corp (LMT), Raytheon Co., (RTN) and Boeing (BA), beginning on the day the Iraq War began March 3, 2003, and held on to those shares through September 23, 2014, the day most American’s first learned about our newest war involvement, the financial rewards would have been impressive.
So impressive that each outperformed the return of the Dow Jones Industrial Average by huge margins.
Over that 11-year time span, the DJIA gained 120 percent, according to Yahoo Finance. As we all know that ride upward was a volatile one and fraught with challenges. The same was true for the three stocks mentioned, but the rewards well,…keep reading.
Raytheon, maker of the Tactical Tomahawk, cruise missiles used in our latest war involvement, closed yesterday (9/23/14) at $100.58 a share with a divided yield of 2.6 percent. The stock has gained 287.9 percent since the beginning of the Iraq War.
Lockheed Martin Corp makes the F-22 Raptor stealth fighters that have been used for years, closed at $176.34 with a dividend yield of 3.2 percent yesterday. In 11 years it gained 304.82 percent
Boeing, among other things, makes munitions. With a dividend yield of 2.4 percent at a per share price of $127.38, it has gained 392.96 percent since 2003.
While I don’t have the stats on what percentage of each company’s income/revenue was directly tied to defense, it’s important to recognize that some growth may have come from elsewhere.
It’s also important to recognize that the future is unknown as are future stock prices.
To read more articles, please visit the column archive.