The ongoing conflict between Russia and Ukraine has stirred anxiety among investors. This week opened with Russian President Vladimir Putin moved to acknowledge two separatist entities in eastern Ukraine. On the morning of February 24, 2022, Putin announced an expansion of military operations into western Ukrainian areas. At the time of this writing Russia’s military had targeted Ukrainian assets as far west as Kiev.
In this environment, investors should be betting on defence spending. The relative decline of U.S. power has led to an increasingly multipolar world, which likely means more Great Power conflict. That should drive to you to snatch up top defence stocks like Raytheon Technologies (NYSE:RTX).
The Waltham-based company is one of the largest defence contractors in the world. Its shares have climbed 6% in 2022 as of close on February 23. The stock is up 18% in the year-over-year period.
Raytheon unveiled its fourth quarter and full year 2021 earnings on January 25, 2022. Sales climbed 14% year-over-year to reach $64.4 billion for the full year. Meanwhile, adjusted net income surged 74% from the prior year to $6.44 billion or 56% on a per share basis to $4.27. Moreover, adjusted operating cash flow increased 65% to $7.14 billion.
At the end of 2021, Raytheon possessed an order backlog of $156 billion. Defence bookings made up $63 billion while commercial aerospace made up the remaining $93 billion.
Shares of Raytheon possess a price-to-earnings ratio of 35, putting it in solid value territory compared to its industry peers.
