Which Stock Should I Invest In After The Russia Ukraine War?
As the conflict between Russia and Ukraine escalates into a full-scale invasion, world leaders have condemned Vladimir Putin and promised harsher sanctions. So as investors scramble to protect their portfolios and find a direction, you need to be aware of what’s happening in the stock markets. If you want to stay on top of what’s happening, subscribe to Insider, a daily newsletter that delivers trading insights.
In the aftermath of the Russia Ukraine war, investors may have second thoughts about Raytheon Technologies’ stock. After all, this aerospace and defense conglomerate has a strong business that produces air defense systems and guided missiles. But is Raytheon just a defense stock? There are other benefits to investing in Raytheon, and the company has a stable dividend yield of over 1.99%.
The military company has a solid history of steady dividends and low volatility, and its stocks have a meager beta ratio. The company also has a history of dividend growth, increasing its payout for 28 straight years. Moreover, the company has a decent forward yield. That means that if the situation in Russia continues to be unstable, the stock is an excellent place to invest.
Despite the risk of further military conflict, the United States and its NATO allies have pledged $3 billion in military aid to Ukraine. As a result, this may spur further investment in U.S. and European defense contractors. In addition, this conflict is likely to lead to more government spending, which should boost prime contractor valuations. And as a result, it will likely increase the demand for such services and products.
In addition to the U.S. and its allies’ increasing defensive capabilities, the NATO allies will bolster their defenses and spend heavily on new military equipment to protect their borders. As a result, military-related stocks should continue to be high. Both Raytheon and Lockheed Martin have seen impressive gains over the past few months. Indeed, Lockheed Martin, the F-35 fighter jet maker, has been on a tear of late, advancing 5.4% on Monday.
The Russia-Ukraine war has put increased pressure on defense stocks, and some have even seen price spikes in the past month. Although overall defense stock valuations were lower in February, they climbed in March.
This may be due to an increased need for defense supplies and a flurry of acquisition talk. But before investing, consider these three things. Read on for more details on the General Dynamics stock to invest in after the Russia Ukraine war.
Assuming that the Russia-Ukraine war won’t go on forever, there are a few reasons to consider buying General Dynamics shares. First, the company is a leader in full-spectrum cyber security and has enjoyed a booming market following the escalation of the conflict. Additionally, the conflict between the United States and Ukraine has heightened cybersecurity concerns in both countries, which has boosted the stock’s prospects.
G.D. stock has been on an upward trajectory since late 2020, and it is currently in the middle of a $213 – $216 resistance level. On Friday, 18 February, G.D. briefly broke through this level. However, it quickly returned to the middle of the support zone. As for the rest of the market, G.D. stock remains a buy for the long-term. A short-term bearish move is likely to occur, but there are many other reasons to remain bullish.
The war in Ukraine has affected the profits of many arms manufacturers. While U.S. military companies are not directly benefiting from the war in Ukraine, U.S. arms makers stand to benefit from supplies of advanced weapons to countries seeking to strengthen their defenses against the Russian invasion. For example, Lockheed Martin and Raytheon Technologies have paid Ukraine for Javelin missile systems. Each missile costs $US178,000. Biden also said that Ukrainian parents are even naming their children after the Javelin missile.
Huntington Ingalls Industries
If you’re looking for an investment stock to buy after the recent Russian-Ukrainian war, Huntington Ingalls Industries (HIL) stock may be a good pick. HIL, the largest military shipbuilding corporation in the United States, is an industry leader. In addition, this company’s operations are critical to the defense and national security of the United States and its NATO allies.
Defense stocks tend to increase in price following international and Washington, D.C. events and are thus predictable. In addition, some companies are defense contractors and receive regular business from the Pentagon, civil agencies, and intelligence services. In light of the recent war in Ukraine, there are several defense-related stocks to consider investing in. The best picks include Raytheon, Lockheed Martin, and BAE Systems.
In response to the Russian invasion of Ukraine, U.S. defense-related stocks have soared in recent trading sessions. And since the U.S. and NATO allies are not intervening in the conflict, they provide Ukraine with weapons and financial support. Germany has pledged to sell 1,000 anti-tank weapons and 500 Stinger surface-to-air missiles. In addition, the G7 finance ministers pledged to channel $113bn into its military this year.
Defense-related stocks have gained significantly from the war in Ukraine. Specifically, defense-related stocks have increased more than 17 percent in dollar terms since the conflict began. And the war has boosted the share prices of defense-related companies like Lockheed Martin and Huntington Ingalls Industries. In addition, the iShares U.S. Aerospace & Defense ETF has surged more than 5% since the Russian invasion of Ukraine.
While the Russian-Ukraine war is troubling, the stock has been a haven for investors. The current state of global politics has led many investors to value stocks and focus on dividend plays, but that has changed with the war in Ukraine. Lockheed shares are trading at 17 times earnings for the next 12 months, where the company has not traded in over a year. Investors should not be surprised to find a dividend yield of 2.58%.
Lockheed Martin is a defense contractor that produces parts for the Stinger anti-aircraft missile. Ukraine has received large numbers of these weapons, and U.S. arms manufacturers benefit from increased demand from countries seeking to increase their defenses against Russia. The company hopes that its investments in Ukraine will lead to more production contracts, refueling its current stock of missiles while supporting countries seeking to purchase more weapons.
Another member of Congress with a conflict of interest is Rep. John Rutherford. The Republican holds Lockheed Martin stock and also has a stake in Raytheon. These stocks are tied to his defense portfolio, and he is a critical player in the broader defense industry. He has invested in the company after the Pentagon’s recent decision to send anti-tank missiles to Ukraine. Rep. Rutherford’s office did not respond to an Insider inquiry, and neither did his office’s spokesperson.
As for the current security environment, it is difficult to predict how long the war will last. There are two factors to consider: the cost of military spending and the size of the market. Fortunately, the U.S. and its allies can afford to do so without incurring huge costs. However, while the U.S. can meet Russia’s force with force, the U.S. cannot do so with China because it is so deeply ingrained in our economic infrastructure. As such, it is logical that we invest in defense stocks now.
Amid the growing geopolitical tensions, investors might want to consider buying Northrop Grumman stock after the conflict in Ukraine. This company, which produces attack drones and other military equipment, has increased its stock price by 3%. Huntington Ingalls Industries, the largest U.S. military shipbuilder, has also risen in recent days. The Dow Jones Industrials, which measures the performance of U.S. stocks, has risen 760 points since the conflict began on 23 February. The Dow closed at 33,892, up more than 3% as of Monday.
While many investors have focused on buying energy stocks, other companies have found that defense equipment and systems integration stocks have seen a significant increase in recent days. Northrop Grumman stock jumped 6.4% before the bell on Friday. Raytheon Technologies and Lockheed Martin also posted impressive gains. According to the Zacks Consensus Estimate, the company’s earnings per share are expected to grow by 5.3% in 2022.
Raytheon Technologies is another stock to consider buying after the conflict in Ukraine. Raytheon is the maker of the Stinger ground-to-air missile. Germany has pledged to supply Ukrainian forces with the weapon. Lockheed Martin, meanwhile, made the F-35 fighter jet, and both stocks are up 4.6% on Monday. The two companies also manufacture Patriot missile defense systems, deployed alongside Nato battlegroups in Slovakia.
The Russian invasion of Ukraine has caused humanitarian concerns as Ukrainians flee and join the resistance movements. Despite this, the global economy has continued to advance. The stock market has suffered a sharp loss, but oil prices have soared. As militaries prepare for the conflict, defense contractor stocks could rise rapidly. So, should investors buy Northrop Grumman stock? If so, what should they do?