Seven High Yielding Defense and Aerospace Stocks

I think that it is a good idea to own at least one defense stock before October. Many of the defense and aerospace stocks have dropped in price during the last couple months, which may be a buying opportunity. While you are waiting for them to move up, you can receive dividends on the higher yielding stocks. All of the following have yields above 1.2%, PEG ratios below 2, and all but one with a P/E below 16.

• Embraer, also known as Empresa Brasileira De Aeronutica S.A. (ERJ), is based in Brazil, makes and markets jets and aircraft for defense and civil aviation markets. The stock has a P/E of 12, a PEG of 0.81, and pays a yield of 2.7%.
• Boeing (BA) makes and markets jets, military aircraft, missile defense systems, satellites, and launch systems. The stock has a P/E of 11, a PEG of 0.82, and pays a yield of 2.4%.
• Northrop Grumman Corp. (NOC) provides aerospace products, electronics, and shipbuilding to the military, government, and commercial customers. The stock has a P/E of 14, a PEG of 0.98, and pays a yield of 2.4%.
• Raytheon (RTN) has six divisions: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services. The stock has a P/E of 10, a PEG of 1.11, and pays a yield of 1.9%.
• General Dynamics Corp. (GD) manufactures aviation products, combat vehicles, weapons systems, and munitions. The stock has a P/E of 15, a PEG of 1.46, and pays a yield of 1.7%.
• Lockheed Martin Corporation (LMT) manufactures military aircraft, and air vehicles, including the F-35 Joint Strike Fighter, the F-22 air dominance attack aircraft, and the F-16 multi-role fighter. The stock has a P/E of 14, a PEG of 1.18, and pays a yield of 1.6%.
• Elbit Systems Ltd. (ESLT) is an Israeli company that makes unmanned air vehicles; advanced electro-optic and space technologies, electronic warfare suites, airborne warning systems, electronic intelligence systems, military communications systems. The stock has a P/E of 27, a PEG of 1.98, and pays a yield of 1.4%.

Disclosure: The author does not own any of the above stocks.

Comments

[Alex_80:]

I follow most of the stocks you mention, and they are good investments. But how can you call them high yielding? Even the highest in the list has a meager 2.7%.

2008 Aug 01 03:00 PM

[notsosmart:]

these yields are a joke.the inflation rate of 5 daily needs is app. 15-16%.look at FRO &NAT.i have no connection to these co.,s except as a stockholder who wont sell even tho i could double my money.seem well run & the 15% income tax limit makes this attrctive.

2008 Aug 01 03:45 PM

[Universal H...:]

notsosmart, you should take some of your tanker stock dividends and invest in a remedial grammar, spelling, and punctuation class. (Also, it wouldn't hurt to get your "shift" key fixed.) And for future reference, you're going to have to prepare a little more than by just watching Cramer before trying to smack-talk with Stockerblog...

2008 Aug 01 05:02 PM