© Reuters. Boeing vs. Northrop Grumman: Which Aerospace & Defense Stock is a Better Buy?
The recent advancement of the Pentagon’s defense spending bill for its fiscal year 2022 in the U.S. House of Representatives, and expected stability in the department’s spending, should keep investors focused on aerospace and defense stocks in the coming months. We think two prominent players in this space, Boeing (BA) and Northrop Grumman (NOC), should benefit from this backdrop given their market dominance. But which of these two stocks is a better buy now? Let’s find out.The Boeing Company (NYSE:) and Northrop Grumman Corporation (NYSE:) are two prominent players in the aerospace and defense sector, BA operates through four segments—Commercial Airplanes; Defense; Space & Security; Boeing Global Services; and Boeing Capital. NOC operates through four segments: Aerospace Systems; Innovation Systems; Mission Systems; and Technology Services.
Because a $706 billion Pentagon spending bill has been advanced by the House Appropriations Committee on a party-line vote, the aerospace and defense industry is expected to attract investors’ attention in the coming months. Furthermore, the demand for aerospace and defense equipment is increasing as several countries focus more on strengthening their defense capabilities. Investors’ interest in this space is evidenced by the iShares U.S. Aerospace & Defense ETF’s (ITA) and SPDR S&P Aerospace & Defense ETF’s (XAR) 29.1% and 36.8% returns, respectively, over the past nine months, versus the SPDR S&P 500 ETF Trust’s (SPY) 25.1% gains. The global aerospace and defense market is expected to hit $973.2 billion in 2025, growing at a 6% CAGR.
While NOC has gained 15.7% over the past nine months, BA has returned 35.6%. However, in terms of the past six months’ performance, NOC is a clear winner with 21.1% returns versus BA’s 9%. But which of these two stocks is a better pick now? Let’s find out.
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