Central banks across major economies are keeping a close eye on inflation and signalling that interest rates could stay higher for longer. That keeps funding costs and long term contracts in the spotlight, which matters for companies tied to long duration projects such as aerospace and defense. This article highlights three stocks from our Aerospace And Defense screener that help you explore this theme in a focused way.

The stocks covered below are just a small sample of the Aerospace And Defense opportunities. The full screen surfaces 72 more companies with equally focused business models and investment narratives that are not discussed here. To broaden your research and identify higher conviction ideas, head straight into the Aerospace And Defense screener to filter and analyze the wider set of aerospace and defense stocks.

Redwire (RDW)

Redwire is a pure play on space infrastructure and defense technology, supplying mission hardware such as sensors, avionics, infrared and RF payloads, spacecraft platforms, and in space manufacturing facilities to government and commercial aerospace and defense customers. It generates revenue across two main segments that are both deeply tied to this theme, with about $208.9 million from Space and $217.4 million from Defense Tech, while operating globally from a base in the United States and Europe. Redwire is a mid cap stock with a market value of about $3.2b.

For an investor focused on aerospace and defense, Redwire offers rare exposure to both on orbit infrastructure and uncrewed airborne systems at the same time that its backlog, new contracts with NATO and US defense agencies, and facility expansions are building visibility on future work. The trade off is that the company remains loss making, carries higher risk funding, and is still bedding down a large acquisition, so the current story leans heavily on execution and a clearer path to sustainable margins. If you want space hardware, ISR sensors, and defense UAS exposure in a single stock, Redwire may be worth a closer look to see whether that balance of growth potential and risk fits your portfolio.

Redwire’s twin exposure to space infrastructure and defense tech could be masking a very different risk reward profile than many investors assume. For more details, see the full context in the 2 key rewards and 3 important warning signs (2 are major!).

Build your own aerospace and defense shortlist

Redwire and the other two aerospace and defense stocks in this article all surfaced from a single screener, but the real edge comes from tailoring filters to your own style. Use our flexible Screener to mix valuation, growth and risk metrics, or tap straight into our curated Investing Ideas for ready made starting points.

General Electric (GE)

General Electric, now operating as GE Aerospace, is a large jet engine and aircraft systems manufacturer firmly tied to the Aerospace And Defense theme through its commercial and military propulsion businesses. The Commercial Engines & Services segment is the largest contributor, generating about $37.7b from commercial jet engines, spare parts and MRO work, while Defense & Propulsion Technologies adds roughly $11.5b from military engines, avionics, power systems and related components alongside $1.4b from Corporate & Other activities. GE Aerospace is a large cap stock with a market value of roughly $389.2b.

GE Aerospace gives you direct exposure to commercial engines, a large aftermarket services base and a defense propulsion portfolio, supported by a backlog and recent engine awards in both civilian and military markets. The focus is on recurring services cash flow and reported ROE, helped by digital MRO tools and international defense contracts. However, investors also need to weigh leverage, valuation and margin pressure, as high cost new engines and supply chain delays affect profitability until at least 2028. For investors who want deeper exposure to jet engines and defense propulsion rather than a broad industrial conglomerate, GE Aerospace may be worth studying more closely to see how those trade offs line up with personal risk tolerance.

GE Aerospace’s services engine and defense backlog could be masking an entirely different risk and reward picture than the headline story suggests.

Kratos Defense & Security Solutions (KTOS)

Kratos Defense & Security Solutions is a defense technology company focused on jet powered unmanned aerial systems and propulsion for drones, missiles, hypersonic vehicles, and space launch, alongside satellite ground systems and other government solutions. It generates about $317 million from Unmanned Systems and roughly $1.2b from Kratos Government Solutions, primarily serving U.S. and allied defense and national security customers. Kratos is a mid cap stock with a market value of roughly $11.6b.

Kratos Defense & Security Solutions gives you exposure to several in demand areas of modern defense, from hypersonics to tactical drones and counter UAS systems, with recent contract wins and new facilities pointing to a growing production footprint. At the same time, the company is spending heavily on capacity and relies on government budgets and key suppliers, which can put pressure on free cash flow and margins. For investors who want an alternative to a slow moving prime contractor, Kratos offers a focused way into next generation defense platforms, with balance sheet and execution questions that may merit deeper research.

Kratos looks like a pure growth story on drones and hypersonics, yet its heavy investment and reliance on government budgets could be telling a different tale. The 2 key rewards and 1 important warning sign hints at what might be hiding in plain sight

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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.