Finally, after what seems ages, the election has been settled. In what was one of the most grueling political events in a lifetime, we finally found out early Wednesday that Donald Trump will be the 45th President of the United States. The market responded well yesterday, and the bond market, which has rallied for 20 years got hit hard. One thing is for sure, certain sectors and stocks should benefit.

A new research report from Stifel makes the case that pure-play defense stocks may be a solid choice for investors to consider now. They also make a good point when the note this in their report:

The bottom line is that, historically, defense spending has been driven by the threat environment – which remains high, regardless of who is President. We have heard competing theories from investors as to whether Mr. Trump will be positive or negative for defense. Our view is that he will be a net positive – with the caveat that his foreign policy initiatives do not impede the US defense industry’s ability to sell to foreign allies.

Of the companies they consider pure-play defense stock that make good sense going forward, these four are higher profile stocks.

Lockheed Martin

This is a top aerospace and defense stock to buy, and many on Wall Street are expecting a very solid continuation of U.S. and foreign defense spending. Lockheed Martin Corp. (NYSE: LMT) researches, designs, develops, manufactures, integrates, operates and sustains advanced technology systems, products and services. It also provides a wide range of defense electronics products and IT 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 2.87% dividend. The Wall Street consensus price target is $267.76. Shares closed Wednesday at $253.46.

Northrop Grumman

The top defense company was ranked as the sixth-largest defense contractor by sales last year. Northrop Grumman Corp. (NYSE: NOC) provides innovative systems, products and solutions in unmanned systems, cyber, C4ISR and logistics and modernization to government and commercial customers worldwide. The Aerospace Systems segment designs, develops, integrates and produces manned aircraft, unmanned systems, spacecraft, high-energy laser systems, microelectronics and other systems and subsystems.

The Information Systems segment offers advanced solutions for Department of Defense, national intelligence, federal civilian, state, international and commercial customers. This segment provides products and services primarily in the fields of command and control, communications, cyber, air and missile defense, intelligence processing, civil security, health information technology, and government support systems.

The Technical Services segment provides logistics, modernization and sustainment services, as well as other advanced technology and engineering services, including space, missile defense, nuclear security, training and simulation services.

Shareholders receive a 1.5% dividend. The consensus price target is $240.69, but shares closed yesterday at $242.30.

Raytheon

This company has a diversified mix of businesses and is also a top fourth-quarter pick at top Wall Street firms. Raytheon Corp. (NYSE: RTN) is an industry leader in defense, government electronics, space, information technology and technical services.

The company reported solid third-quarter net sales and 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 will continue for years to come.

Raytheon investors receive a 2% dividend. The consensus price target is $155.63. The shares closed yesterday at $146.66.

Huntington Ingalls

This company is more off the radar, but it also has outstanding upside potential. Huntington Ingalls Industries Inc. (NYSE: HII) engages in designing, building, overhauling and repairing ships primarily for the U.S. Navy and the U.S. Coast Guard. It is involved in the design and construction of non-nuclear ships, comprising amphibious assault ships that include deck amphibious ships and transport dock ships; surface combatants; and national security cutters.

The company also provides nuclear-powered ships, such as aircraft carriers and submarines; refueling and overhaul, and inactivation services for nuclear-powered ships; and fleet support services comprising depot maintenance, modernization, repairs, logistics and technical support and planning yard services for naval and commercial vessels.

In addition, the company offers naval architecture and marine engineering, ship system assessment, maintenance engineering and logistics services; and a range of support services to commercial nuclear power plants, nuclear energy facilities and fossil power plants and other industrial facilities.

Shareholders receive a 1.47% dividend. The consensus price objective is $169.36. Shares closed yesterday at $167.59.

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These stocks had a big day on the heels of the Trump victory. It might make sense to nibble some here and wait for a pull back to increase position size. These stocks all fit well in growth and income accounts.

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