Global bond yields have climbed as investors reassess inflation and policy risks, which keeps attention on sectors linked to government spending and long cycle programs. Aerospace and defense companies often depend on multi year contracts that can look attractive when borrowing costs are higher elsewhere. This article highlights three stocks from the Aerospace And Defense screener that could help you think more clearly about this theme right now.

The stocks in the article below are only a starting sample, and the full screen surfaced 308 more Aerospace and Defense companies with equally compelling narratives that are not covered here. To identify and analyze your own highest conviction ideas in this space, head straight to the Aerospace And Defense screener.

Rheinmetall (XTRA:RHM)

Rheinmetall is a €54.98b defense and mobility group best known to investors for its Vehicle Systems and Weapon and Ammunition segments, which supply armored combat vehicles, artillery, turrets, air defense systems and munitions to government customers. These two segments generated about €5.53b and €3.97b in revenue respectively, making traditional defense platforms and ammunition the main commercial link to the Aerospace and Defense theme, while electronics and civil mobility activities play a secondary role. For investors, Rheinmetall offers direct exposure to long term defense procurement with substantial scale rather than a pure play on any single program.

Rheinmetall gives you rare scale exposure to armored vehicles, munitions and air defense at a time when NATO rearmament and multi year contracts have pushed its order backlog to about €80.4b. The company has a 3 year earnings growth forecast above 30% and profit margins already in double digits. That growth story comes with real trade offs, including high reliance on European government budgets, a funding structure built on external debt and a share price that has been volatile and has lagged peers recently. If you want to understand whether a high P/E and rich order book are justified by its pipeline, electronics push and missile ambitions, Rheinmetall is a company worth a closer look.

Rheinmetall’s rich order book and high P/E hint at stronger earnings power than many investors may be factoring in. To see how that growth profile compares with key risks and cash needs, review the analyst forecasts for Rheinmetall

Build your own defense growth shortlist

Rheinmetall and the two other stocks in this article all surfaced from a single Aerospace and Defense screen, but the real edge comes from building your own filters around growth, valuation, balance sheet strength and risk. Use our flexible Screener to shape a shortlist that fits your style, or jump straight into curated themes with our latest Investing Ideas.

Redwire (RDW)

Redwire is a US$3.22b space technology company that supplies spacecraft sensors, star trackers, space situational awareness payloads, in space manufacturing platforms and other critical infrastructure to government and commercial customers. Its business is split between Space, at about US$208 million of revenue, and Defense Tech, at about US$217 million, giving investors exposure to both orbital systems and defense focused autonomous platforms within the broader aerospace and defense theme.

Redwire gives you direct exposure to the build out of space infrastructure, from payloads and spacecraft platforms to uncrewed aerial systems and microgravity research facilities. The company is winning contracts with NATO allies and US agencies, reporting record revenue and backlog in Q2 2026. It is still loss making and depends heavily on large, complex government programs. For investors who can accept that mix of contract momentum, dilution risk and funding needs, Redwire’s portfolio of high value subsystems and in space manufacturing projects offers a higher risk, higher potential way to gain exposure to the aerospace and defense theme.

Redwire’s contract momentum and record backlog suggest investors may be missing how its space and defense platforms fit together. Get the full story in the analysis report for Redwire

Kratos Defense & Security Solutions (KTOS)

Kratos Defense & Security Solutions is a defense technology company that builds jet powered unmanned aerial drones, loitering munitions, hypersonic and rocket propulsion systems, and command and control and ISR software, which are its clearest links to the Aerospace and Defense theme. These activities sit alongside its broader government solutions work, with about US$317 million of revenue from Unmanned Systems and around US$1.21b from Kratos Government Solutions. The stock has a market cap of roughly US$11.6b.

Investors looking at aerospace and defense may want to pay attention to how Kratos is tying together unmanned systems, hypersonics and propulsion into a single product ecosystem for the U.S. Department of Defense and allies. Recent contract wins in counter drone systems, hypersonic test programs and missile engines suggest potential multi year demand, while a growing pipeline offers some visibility on future work. On the other hand, Kratos operates with modest profit margins, uses external borrowing and depends heavily on government budgets, so execution and cash generation are important areas to watch. For investors focused on companies involved in next generation drones and missile technology rather than legacy platforms, Kratos may be a candidate for further research and monitoring.

Kratos is stitching together drones, hypersonics and propulsion into a single story that many investors may still be underestimating. Before that contract pipeline fully crystallises, walk through the 2 key rewards and 1 important warning sign

Curious About Alternative Stock Paths?

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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.