Good defense stocks

Screening Filters

1. Industry: Aerospace & Defense

   • Purpose: Focus directly on defense-related companies.
   • Rationale: The user asked for “defense stocks.” The Aerospace & Defense industry classification captures companies involved in military equipment, defense systems, aerospace platforms, and related services. This ensures the results are actually defense plays, not just general industrial or tech names.

2. Market Cap ≥ $10,000,000,000 (Large Cap)

   • Purpose: Prioritize established, “safer” defense companies.
   • Rationale: “Good” defense stocks typically suggests stable, well-known players with proven track records, diversified revenue, and stronger balance sheets. A $10B+ market cap filter removes small, speculative defense contractors and focuses on large, more resilient firms that institutions tend to own.

3. Beta: LowRisk / ModerateRisk

   • Purpose: Limit the list to stocks with lower to moderate volatility.
   • Rationale: Many investors looking for “good” defense stocks are seeking stability and downside protection, often viewing defense as a defensive (no pun intended) sector. Restricting to low or moderate beta helps target names that historically move less violently than high-beta, speculative peers.

4. Dividend Yield (TTM): 1.5% to 6%

   • Purpose: Find defense stocks that return cash to shareholders without extreme yield risk.
   • Rationale: Established defense companies often pay steady dividends. A floor of 1.5% filters out zero/very low yielders, while a cap at 6% avoids “too good to be true” yields that often signal distress. This range balances income generation with quality.

5. Analyst Consensus: Strong Buy / Moderate Buy

   • Purpose: Incorporate current professional opinion on attractiveness.
   • Rationale: To find “good” defense stocks today, this filter leans on the aggregated views of equity analysts. Limiting to Strong Buy and Moderate Buy suggests that, based on recent research, these names have favorable fundamentals and/or valuation relative to their peers.

Why Results Match:

• They are pure defense or closely tied to defense spending (Aerospace & Defense filter).
• They are larger, more established companies, which many investors consider “good” core holdings (large-cap filter).
• They aim for more stable price behavior, aligning with the defensive nature of the sector (low/moderate beta).
• They offer reasonable, sustainable dividends, a common hallmark of quality in defense stocks (dividend yield band).
• They are currently favored by analysts, supporting the idea that they’re fundamentally attractive (analyst consensus).