At the top of NATO in The Hague, the Member States of the Alliance concluded an agreement on a gradual increase in defense spending, with an objective of 5%. This figure must be divided into 3.5% strictly for defense and 1.5% for other expenses, including the development of infrastructure, research and innovation. At this stage, only Spain increases objections, diplomatically insisting on the level of 2% – which, however, encountered a typical and incisive response from Donald Trump, who called the Spanish as “Stoways”. In any case, the target date to reach this level is 2035, and it is certainly questionable to know if all the members will respond to their commitments during the next decade. We will therefore take a look at companies with strong growth potential in the defense industry sector, which could benefit from an increase in arms expenditure.
1. V2X INC – growth potential of more than 20%
V2X INC (NYSE 🙂 is a defense company offering a wide range of services in areas such as radar systems, the defense of critical infrastructure and aircraft with several roles. According to the fair value index, the company has more than 20% growth potential with a moderate financial situation.
Source: InvestingPro
Significantly, the company has always declared a positive net income in the last three quarters, which has not been the norm in recent years. The latest results showed a profit per share of $ 0.98, beating the consensus by 5.1%. If we obtain a bullish technical signal in the form of a break greater than $ 52 per share, it will be an interesting company to consider from the point of view of a buyer.
2. General Dynamics Corporation with an impressive fundamental profile
Another company on the list is General Dynamics Corporation (Nyse :), which specializes in the construction of military systems at sea and land. The upward potential is estimated at just over 12%, in the midst of a moderate increase in continuous increase since mid-February. What stands out is the fundamental profile of the company, which shows a full range of positive indicators.
Source: InvestingPro
The company is also clearly attractive for the dividend …
..
