With central banks leaning toward tighter policy, inflation still in focus and energy markets reacting to geopolitical headlines, many investors are looking for sectors that sit close to long term government and commercial spending. The Aerospace and Defense screener zeroes in on companies that manufacture or provide services to this space, offering a focused way to research businesses that are closely tied to large, often multi year projects. This article walks through 3 notable stocks from that screener, highlighting what each company does, how it fits into today’s cross currents and which key metrics are worth watching next.

Howmet Aerospace (HWM)

Overview: Howmet Aerospace is a Pittsburgh based manufacturer of advanced metal components, fasteners and forged wheels that are built into aircraft engines, airframes and heavy trucks across global aerospace and transportation markets.

Operations: Howmet Aerospace generates most of its 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, with a small offset from inter segment sales.

Market Cap: US$111.0b

Investors looking at Howmet Aerospace are getting exposure to rising commercial and defense aircraft build rates, where higher margin engine parts and fasteners have been supporting strong earnings and a 20.2% net margin. Recent results show revenue of US$2.3b and a 42% jump in adjusted EPS in Q1 2026, alongside raised full year guidance. This helps explain why analysts are comfortable projecting higher future earnings. However, a rich P/E multiple, meaningful debt and concentrated exposure to large customers like Boeing and Airbus mean the bar for execution is high. Assessing how those growth expectations compare with balance sheet risk and elevated valuation is a key part of the investment case.

Howmet Aerospace’s rising margins and higher EPS guidance suggest momentum that many investors may be underestimating, but the real question is whether the growth story still stacks up against its valuation multiples in the analyst forecasts for Howmet Aerospace

Mercury Systems (MRCY)

Overview: Mercury Systems is a defense electronics company that supplies high performance processing, radio frequency components, sensors, and integrated subsystems used in radar, electronic warfare, intelligence, and aerospace platforms for government and commercial customers. It focuses on secure, mission critical computing and signal processing that sit inside modern military aircraft, ships, ground systems, and space programs.

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

Market Cap: US$6.8b

Mercury Systems provides targeted exposure to defense modernization, where demand for secure, high performance computing in radar, electronic warfare and space systems is contributing to a healthier backlog and multi year contracts. Recent orders for its Common Processing Architecture servers and space grade recorders point to identifiable programs. At the same time, the company is still loss making, has relied on accelerating deliveries, and faces the overhang of legacy low margin contracts and higher risk funding. Management’s ability to keep improving margins while converting backlog into cash flow will be important, and the trade offs between execution risks and valuation are key considerations for investors.

Mercury Systems’ accelerating backlog and loss making profile point to a story that many investors may be only half seeing; the real test sits in the 1 key reward and 1 important warning sign

Astronics (ATRO)

Overview: Astronics is a US based supplier of aircraft electrical power, lighting, connectivity and safety systems, along with test equipment that supports aerospace, defense, communications and mass transit customers around the world.

Operations: Astronics generates almost all of its revenue from Aerospace at about US$819.8m, with a smaller contribution from Test Systems at about US$67.5m and a minor offset from intersegment sales.

Market Cap: US$3.2b

Astronics stock provides focused exposure to aircraft build rates and airline cabin upgrades. Higher margin power, lighting and connectivity products are supported by a record backlog, recent Q1 2026 revenue of US$230.6m and raised full year guidance to a range of US$970m to US$1b. The company has only recently moved into profitability and still carries meaningful debt, tariff exposure and execution risk in its Test Systems segment. Any stumble could matter for a stock already priced on rich expectations. For investors, the key question is whether the combination of aerospace driven earnings, portfolio adjustments and new US Army radio test orders is enough to justify paying a premium for Astronics while legal and restructuring risks remain in play.

Astronics’ record backlog and recent move into profitability hint that the story could be just getting started; however, debt, tariffs and Test Systems keep the outcome finely balanced, so it is worth reading 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 screener surfaces 297 more companies that carry equally compelling narratives, contract profiles and balance sheet setups within the broader sector through the Aerospace And Defense screener. Use Simply Wall St to identify, filter and analyze the specific catalysts, contract backlogs, margins and risk factors that matter most to you so you can focus on the highest conviction opportunities in this theme.

Take Control of Your Investment Journey

If Howmet Aerospace 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.

Seeking Fresh Alternatives Before Others Catch On?

Some of the fastest breakout stories start flying before most investors notice, and early momentum can fade quickly. Scan these fresh stock ideas while it matters and consider them early in your research process.

• Spot companies quietly compounding strength by running a list of solid balance sheet and fundamentals (48 results) so you are focusing on businesses built to hold up when conditions get tougher.
• Follow powerful structural shifts by tapping into 34 power grid technology and infrastructure stocks that highlight companies tied to the critical backbone of future electricity demand.
• Track early price and earnings momentum with 48 high quality undervalued stocks that flag financially robust stocks still trading below many investors’ radars, before sentiment starts moving.

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.