With inflation trends, energy prices and central bank policies pulling markets in different directions, many investors are looking for themes backed by structural demand rather than short consumer cycles. Aerospace and defense sits in that camp, tied to long term government budgets, trade flows and global security priorities. The Aerospace And Defense screener focuses on companies that manufacture or provide services to these industries, helping you narrow a broad universe to businesses directly exposed to this theme. In this article, you will see 3 stocks from the screener that may be useful candidates for further research.

Howmet Aerospace (HWM)

Overview: Howmet Aerospace is a long established Pittsburgh based manufacturer of highly engineered parts for aircraft engines, airframes, defense systems and heavy duty trucks, supplying critical components like airfoils, fasteners, titanium structures and forged aluminum wheels to major OEMs around the world.

Operations: Howmet Aerospace generates most of its roughly US$8.6b in annual segment revenue from Engine Products at US$4.6b, followed by Fastening Systems at US$1.8b, Engineered Structures at US$1.1b and Forged Wheels at US$1.1b, partly offset by US$18m in inter segment sales.

Market Cap: US$111.1b

Investors looking at Howmet Aerospace see a supplier tied into long term commercial and defense aircraft programs, where higher content on newer jets and steady spare parts demand have supported 39% earnings growth over the past year and a 20.2% net margin. At the same time, the stock trades on an expensive P/E multiple, is described as highly leveraged and has seen meaningful insider selling. All of these factors raise questions about how much optimism is already reflected in the price. If you want to understand whether its strong 31.6% ROE, capacity expansion plans and recent acquisitions justify that premium, there is more to unpack in the detailed narrative and valuation work behind this summary.

Howmet Aerospace’s 31.6% ROE, strong margins and premium P/E suggest a story that might be only partially priced in. Get the fuller picture with the 2 key rewards and 2 important warning signs

Mercury Systems (MRCY)

Overview: Mercury Systems is a US based defense electronics company that supplies high performance computing, sensor and signal processing hardware to defense contractors and aerospace customers, helping power modern radar, electronic warfare, intelligence and UAV systems. It focuses on secure, mission critical subsystems that sit at the heart of data intensive military and space applications.

Operations: Mercury Systems generates essentially all of its US$967m in revenue from Aerospace & Defense, with around US$942.8m coming from the United States and US$57.8m from Europe, partly offset by US$33.6m of eliminations.

Market Cap: US$6.8b

Mercury Systems sits in a part of defense where spending is concentrated, supplying embedded processing and secure computing for radar, electronic warfare and space programs. Recent multi year orders for BuiltSECURE servers and radiation tolerant recorders underline its role in high end projects. At the same time, the company is still loss making, carries higher risk borrowings and has relied on tactics like accelerated deliveries. The share price already embeds high expectations and there has been recent insider selling. For investors, the real question is whether improving margins, a richer backlog and exposure to defense digitization can outweigh these funding and execution risks, or whether today’s valuation leaves limited room for error.

Mercury Systems sits at the point where defense digitization meets high expectations. However, the share price and insider moves hint at a more complicated story. Get the full context with the analysis report for Mercury Systems

Astronics (ATRO)

Overview: Astronics is a long running East Aurora based supplier of aircraft lighting, power, seating motion, avionics and test systems that sit inside commercial jets, military aircraft and mission critical electronics, serving major airframe manufacturers, airlines, defense contractors and government programs around the world.

Operations: Astronics generates the vast majority of its roughly US$820m in revenue from its Aerospace segment, with about US$67.5m from Test Systems and a small amount of intersegment eliminations.

Market Cap: US$3.5b

Astronics provides focused exposure to rising aircraft builds and cabin upgrades, with high margin aerospace products, record bookings and a growing defense backlog including the U.S. Army radio test program. It also carries meaningful risks from high debt, tariff exposure and a Test segment that has faced execution setbacks and legal costs. Strong earnings growth, a 28.06% ROE and management’s confidence around 2026 guidance sit against a rich valuation and funding that leans heavily on external borrowings. The key consideration for investors is whether expanding margins and backlog can support that optimism or whether the current pricing already reflects most of the positive factors.

Rising margins, a 28.06% ROE and a swelling backlog make Astronics look like a rebuild story that many investors may be underestimating, yet the balance of debt, tariffs and Test segment issues in the 2 key rewards and 2 important warning signs (1 is major!)

The three Aerospace and Defense stocks in this article are only a starting point. The full Simply Wall St screener surfaces 298 more companies that each carry their own potentially compelling aerospace and defense narrative through the Aerospace And Defense screener. Use Simply Wall St to identify, filter and analyze the specific catalysts, balance sheet profiles and contract exposures that matter to you so you can focus on the highest conviction ideas in this theme.

Take Control of Your Investment Journey

If Mercury Systems or any of these companies have caught your attention, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value and track any new developments as they happen. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.