Global growth forecasts sit near 3% and central banks are treading carefully, while geopolitical tensions and energy prices keep inflation risks on the radar. In this kind of mixed backdrop, many investors are looking for clearer, more focused themes rather than broad market exposure. The Aerospace And Defense screener does exactly that by zeroing in on companies tied to aircraft, space, and defense-related products and services, an area closely linked to government and commercial demand over longer periods. This article highlights 3 notable stocks from that screener to help you decide whether this theme deserves a closer look in your portfolio.

Saab (OM:SAAB B)

Overview: Saab is a Swedish defense and security company that supplies fighter aircraft, submarines, radar, missile systems, electronic warfare and related services to military and civil customers across Europe, North America, Asia and other regions. Its operations span aeronautics, advanced sensors, guided weapons, naval platforms and technology consulting, giving it exposure to multiple parts of the defense value chain.

Operations: Saab generates most of its revenue from Surveillance at SEK28.97b, Dynamics at SEK21.16b and Aeronautics at SEK19.81b, with smaller contributions from Kockums at SEK9.93b and Combitech at SEK5.16b, while Sweden at SEK34.08b and the rest of Europe at SEK22.31b are its largest geographic markets.

Market Cap: SEK303.30b

Saab stands out in the Aerospace and Defense theme because it combines broad exposure to aircraft, sensors, missiles and submarines with a growing stream of long-term contracts such as NATO’s move toward GlobalEye and recent fighter and submarine deals in Europe. Earnings growth of 38.9% over the last year, a sizeable order backlog and expanding high-margin service and digital offerings contribute to its cash generation profile, even though the P/E multiple is high. At the same time, investors need to weigh concentration in government contracts, heavier reliance on external borrowing, and ongoing digitalization and capacity investments that could pressure margins if new orders slow. The full picture of Saab’s opportunity and risk balance is more nuanced than the headline defense story suggests.

Saab’s accelerating orders and high-margin services could be masking a much more interesting story about quality and risk. Get the full picture in the 2 key rewards and 1 important warning sign

Moog (MOG.A)

Overview: Moog is a US-based engineering company that supplies precision motion and fluid control systems used in aircraft, defense platforms, space vehicles, industrial automation, medical equipment, and simulation and test systems worldwide. Its technology sits inside mission-critical applications, from flight controls on jets and rotorcraft to actuation systems on missiles, satellites, and heavy machinery.

Operations: Moog generates most of its revenue from Space and Defense at US$1.23b, followed by Industrial at US$1.01b, Commercial Aircraft at US$984.68m, and Military Aircraft at US$943.77m.

Market Cap: US$12.86b

Moog appears in the Aerospace And Defense screener because it ties together high-value defense and aerospace programs with industrial automation and medical exposure, supported by record revenues, rising earnings, and a growing aftermarket and services mix. Forecast earnings growth around 15.7% a year and an expected improvement in return on equity to 28.9% indicate the business could become more profitable. However, the high P/E multiple and reliance on external borrowing mean investors may be paying a premium while taking on balance sheet risk. In addition, tariff exposure, aircraft program delays, and insider selling make Moog a complex case in which quality earnings and technological capabilities coexist with questions about valuation and cash generation that investors may wish to assess carefully.

Moog’s accelerating programs and record revenues may not be the whole story, especially with that high P/E and borrowing in the background. Review the analysis report for Moog to see what could be missing.

Thales (ENXTPA:HO)

Overview: Thales is a French technology and defense company that provides air defense systems, avionics, cyber security, satellites, and digital identity solutions to governments and large enterprises worldwide, aiming to secure communications, critical infrastructure, and air and space operations.

Operations: Thales generates most of its revenue from Defence (excluding Digital Identity & Security) at €12.59b, followed by Aerospace at €6.09b and Cyber & Digital at €3.98b, with smaller items in Other, while France and the rest of Europe are its largest regional markets.

Market Cap: €46.60b

Thales catches attention in the Aerospace And Defense screener because it combines core defense and avionics programs with higher margin cyber security and digital identity services, supported by solid profitability, including net margins at 7.6% and ROE at 20.5%. Analysts highlight expectations for further earnings growth and a higher long term return profile; however, the stock has recently lagged the French Aerospace & Defense sector and is trading below some value estimates. At the same time, execution issues in Cyber & Digital, restructuring in Space, reliance on government defense budgets, and the sizeable F126 contract charge indicate that earnings carry meaningful risk, making the real risk reward trade off in Thales more complex than headline forecasts suggest.

Thales appears to be a solid earner with 7.6% net margins and 20.5% ROE. However, its recent underperformance hints at something the market might be missing, and the analyst forecasts for Thales could reveal why that gap exists.

The three stocks covered here are only a small sample of what is possible, as the full Aerospace And Defense theme on Simply Wall St surfaces 297 more companies with equally compelling narratives. Unlock the rest of the opportunities and identify the highest conviction ideas by using the Aerospace And Defense screener to filter for the specific catalysts and storylines that matter most to you.

Take Control of Your Investment Journey

If Thales 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.