The World Is Very Dangerous: 4 Dividend Defense Stocks to Buy Now

By Lee Jackson Updated Jan 13, 2:25AM EST · Published Oct 14, 8:25AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

The World Is Very Dangerous: 4 Dividend Defense Stocks to Buy Now — © Thinkstock

[cnxvideo id=”510062″ placement=”ros”]Every day we see it, the violence and fighting, especially in the Middle East, going on unabated, and with Iran being removed from prior sanctions and restrictions, there is another component to continue stirring up the proverbial pot. Toss in a much more aggressive Russia and China, and top the whole thing off with North Korea spouting very belligerent rhetoric, and the whole hot mess gets even uglier.

One thing is for sure, almost regardless of who wins the presidential election, there is going to be a push to rebuild and resupply the military, and the big defense contractors should fare very well in 2017 and beyond. We screened the Merrill Lynch research universe for defense stocks that were rated Buy that also pay big dividends. Four look very good now.

General Dynamics

This company, like other major defense prime contractors, had a very solid year and also makes the best ideas list for the fourth quarter, as well as the US 1 list at Merrill Lynch. General Dynamics Corp. (NYSE: GD) is a worldwide aerospace and defense company, and it has over 96,000 employees worldwide. General Dynamics operates through four business groups: Aerospace, Combat Systems, Marine Systems and Information Systems and Technology. The U.S. government is its largest customer, which could continue to bode well as Congress should remain in Republican hands after the upcoming elections.

The U.S. Coast Guard recently awarded General Dynamics Mission Systems a $125.6 million follow-on contract to provide Rescue 21 program management, system support and maintenance and sustainment engineering support for the U.S. Coast Guard Command, Control and Communications Engineering Center.

Shareholders are paid a 2.01% dividend. The Merrill Lynch has a $170 price target on the stock, while the Wall Street consensus estimate is $169.54. The stock closed most recently at $151.01.

[nativounit]

Honeywell International

This top diversified industrial makes sense for investors looking for a more diverse stock for their portfolio. Honeywell International Inc. (NYSE: HON) is a New-Jersey based diversified, global technology and manufacturing company. Honeywell’s operations are organized under three business groups: Aerospace, Automation and Control Solutions, and Performance Materials & Technologies. The company is a premier supplier of avionics, power and control systems for the aerospace industry.

The company recently slightly lowered third-quarter earnings estimates, and while it raised some questions about the long-term growth trajectory, most on Wall Street remain very comfortable with the story.

Honeywell shareholders receive a 2.2% dividend. The Merrill Lynch price target is $125, and the consensus target is $123.95. The shares closed Thursday at $108.26.

Lockheed Martin

Lockheed Martin Corp. (NYSE: LMT) is another top aerospace and defense stock to buy, as many on Wall Street are expecting a very solid continuation of U.S. and foreign defense spending. Employing 112,000, Lockheed Martin engages in the research, design, development, manufacture, integration and sustainment of technology systems, products and services. The company also provides management, engineering, technical, scientific, logistics and information services.

Earlier this year Lockheed Martin was awarded a $1.27 billion contract for the delivery of 13 F-35 Lightning II aircraft. Six F-35Bs will be going to the Marine Corps, three F-35As to the Air Force and four F-35Cs to the Navy.

Shareholders receive a 3.12% dividend. The Merrill Lynch price objective is $275, and the consensus target is $264.50. The shares closed Thursday at $232.99.

Raytheon

This company has a diversified mix of business and is on the Merrill Lynch high quality and dividend yield screen and is also a top fourth-quarter pick. Raytheon Corp. (NYSE: RTN) is an industry leader in defense, government electronics, space, information technology and technical services. The company operates in four principal business segments: Integrated Defense Systems, Intelligence, Information and Services, Missile Systems, and Space and Airborne Systems.

The company reported net sales of $6 billion in the second quarter, a 3% year-to-year increase. Many top analysts feel that as the aerospace and defense segment grows, Raytheon will continue to be a key figure in the market, something that most likely could continue for years to come.

Raytheon investors are paid a 2.12% dividend. The Merrill Lynch price target is posted at $160, and the consensus target is $156.26. The shares closed at $138.10.

[wallst_email_signup]

The bottom line for investors: spending is going to stay strong for the foreseeable future. That makes these solid holdings for growth and income accounts. And the world will continue to be a very dangerous place.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.