Record US national debt of about US$40t, rising interest costs and fresh spending linked to the war in Iran are reshaping where money flows in markets. Some stocks could feel squeezed by higher financing costs, while others may gain from shifting federal priorities. This article examines 3 U.S. Defense and Aerospace Stocks screener companies that appear especially exposed to these forces and explains what that might mean for your portfolio.

The three U.S. defense and aerospace stocks covered next are only a starting sample, and the full screen surfaced 35 more companies with equally compelling narratives that are not included here. To widen your options, head straight into the U.S. Defense and Aerospace Stocks screener to analyze, filter, and identify the U.S. defense and aerospace stocks that best fit your thesis.

ATI (ATI)

Overview: ATI is a Dallas based materials company that supplies high performance titanium, nickel and specialty alloys, as well as complex forged and machined components, for demanding aerospace and defense platforms alongside medical, energy and industrial uses. For a defense focused investor, the appeal is that ATI sits in the materials and parts supply chain for advanced military aircraft, engines, missiles and naval programs where reliability and performance are critical.

Operations: ATI generates most of its revenue from High Performance Materials & Components at about US$2.7b and Advanced Alloys & Solutions at about US$2.5b, with the bulk of sales coming from the United States at roughly US$2.8b.

Market Cap: US$30.8b

ATI may warrant closer examination if you want exposure to the U.S. defense and aerospace supply chain rather than just prime contractors. The company focuses on titanium and nickel based alloys and components that go into jet engines, missiles and naval nuclear systems, supported by a multi year backlog of around US$4.4b and long term contracts with major aerospace customers. At the same time, ATI carries meaningful debt and a high P/E, so higher interest costs and any delay in defense or aerospace programs could affect returns. If you are weighing defense related opportunities as U.S. debt, rates and defense budgets all shift, ATI combines high quality demand, execution progress and balance sheet risk that may merit detailed scrutiny.

ATI’s high performance materials story is only half the picture. The real question is whether the current P/E and balance sheet risk match the underlying cash potential. Start with the DCF valuation analysis for ATI

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ATI and the two other defense and aerospace stocks in this article all came from the same Simply Wall St screen, but the real value is in setting filters that match how you like to invest. Use our flexible Screener to mix valuation, growth, balance sheet and risk filters, or jump straight into any of our curated Investing Ideas.

Cadre Holdings (CDRE)

Overview: Cadre Holdings manufactures and distributes protective gear such as body armor, bomb suits, blast sensors and duty gear that is used in hazardous situations by military, federal agencies and law enforcement. This gives investors indirect exposure to defense and homeland security budgets through mission critical equipment.

Operations: Cadre generates about US$621.5 million of revenue from its Product segment and US$98.9 million from Distribution, with roughly US$474.9 million coming from the United States and US$210.8 million from international customers.

Market Cap: US$1.4b

Cadre Holdings is worth a closer look if you want exposure to defense and public safety spending without relying on large weapons programs. The company supplies day to day protective gear and nuclear related safety equipment across a wide base of agencies, and recent contract wins such as the US$8.4 million Blast Exposure Monitoring order and the 5 year US$61 million FBI ballistic panel award highlight how government demand can stack into a sizeable backlog. At the same time, high leverage, earnings affected by one off items and reliance on government procurement cycles create real risk if budgets tighten or orders are delayed. If you are comfortable with that trade off, the mix of recurring safety needs and acquisition led growth at Cadre may justify deeper research into its valuation and balance sheet strength.

Cadre Holdings links accelerating contract momentum to everyday protective gear that agencies cannot easily cut, yet higher leverage and budget-sensitive orders leave an important question open in the 2 key rewards and 3 important warning signs

Elmet Group (ELMT)

Overview: Elmet Group supplies precision engineered refractory metal components and high power microwave systems that feed directly into aerospace, defense and government platforms, from radar and missile tracking to directed energy systems. It also serves industrial, medical, semiconductor, electronics and energy customers through its Critical Materials Components and Engineered Microwave Products divisions.

Operations: Elmet Group generates about US$196.4 million of revenue from Critical Materials and Components and US$32.1 million from Engineered Microwave Products, with roughly US$225.4 million coming from the United States and a small contribution from Europe.

Market Cap: US$548 million

Elmet Group provides direct exposure to U.S. defense spending at the materials and subsystems level. It supplies tungsten, molybdenum and microwave hardware into radar, interceptor and other mission critical programs at a time when conflict in Iran and broader geopolitical risk are drawing more attention to defense readiness. Management describes the company as a sole U.S. based supplier for certain components, which can matter as policymakers focus on material independence and tighten export controls. At the same time, Elmet is still working through losses and relies heavily on external borrowing. For investors considering a smaller U.S. defense supplier with strong thematic tailwinds, a growing ADG backlog and clear execution and funding risks, Elmet Group may warrant further analysis.

Elmet Group’s ADG backlog and role in radar and interceptor hardware suggest more is happening beneath the surface. See how the analyst forecasts for Elmet Group stack up against its funding needs and where the real pressure point might be.

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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.