Should You Consider Defense Dividend Stocks?

Do you embrace defense dividend stocks as a long-term strategy? Or do you ignore them due to their ties to government contracts? It's a question many investors ask themselves when a defense dividend stock surfaces in their research. I know it's a question I have asked myself. Do you want a dependency on the US Department of Defense spending or not?
Defense dividend stocks tend to have contracts tied with government spending, but they all have a different level of contract dependence and that can be one of the factors you use in choosing a defense dividend stock. As a summary, you can find the percentage of revenue generated from the US government for the following companies:
Lockheed Martin Corporation (NYSE: LMT) = 70% General Dynamics (NYSE: GD) = 61% L3 Technologies (NYSE: LLL) = 66% Raytheon (NYSE: RTN) = 67% Northrop Grumman Corporation (NYSE: NOC) = 85% The Department of Defense is definitely a major customer as you can see, and you can find the list of top 100 contractors with the US government to understand your general exposure to the government.
Please note while each of the stocks listed have a minimum of 10 years of dividend growth, the review of the companies below does not highlight any preferences or outlook for investment purposes. The intention is to highlight the businesses that operate in the defense and aerospace industry with respect to pure-play defense dividend stocks to understand what you may invest in.
However, to answer if you should... Read more