With energy prices, inflation data and central bank signals all pulling markets in different directions, many investors are looking for businesses tied to long term government spending and essential services. Aerospace and defense stocks fit that description, supplying equipment and support that governments tend to prioritize regardless of shorter term cycles. This article focuses on companies in our Aerospace and Defense screener, which filters for pure exposure to this theme. You will see three stocks from the screener that stand out on business quality, balance sheet profile or diversification potential so you can decide whether they fit your watchlist.

ATI (ATI)

Overview: ATI produces specialty metals and complex components, such as titanium and nickel alloys, that go into aircraft, defense systems, medical devices and energy infrastructure, serving customers that need high performance materials rather than generic steel or aluminum.

Operations: ATI generates most of its revenue from High Performance Materials & Components at US$2.68b and Advanced Alloys & Solutions at US$2.37b, with intersegment sales adjustments of US$446.6m and additional geographic detail not fully broken out.

Market Cap: US$27.1b

ATI sits at the intersection of aerospace, defense and energy transition, with long term contracts across jet engines, airframes and defense programs that can support margin resilience even when industrial demand is softer. Its High Performance Materials & Components segment has been reporting strong margins, supported by process improvements and capacity investments in nickel and titanium alloys. Return on equity of 23.3% points to efficient use of capital. At the same time, a rich P/E multiple, high debt levels and reliance on a small group of large aerospace customers mean you are paying up for quality and concentration risk, so it is worth weighing how those trade offs line up with your own expectations for the stock.

ATI’s rich P/E multiple and 23.3% return on equity suggest something more complex than a typical metals stock, so it is worth scanning the 2 key rewards and 1 important warning sign to see what could shift this story next.

Howmet Aerospace (HWM)

Overview: Howmet Aerospace makes high performance metal parts that sit deep inside aircraft engines, airframes and heavy trucks, from airfoils and fasteners to forged wheels, giving it exposure to both commercial aerospace and ground transportation demand.

Operations: Howmet generates most of its revenue from Engine Products at US$4.61b, supported by Fastening Systems at US$1.81b, Engineered Structures at US$1.15b and Forged Wheels at US$1.08b, with a small inter segment adjustment of US$18m.

Market Cap: US$105.9b

Howmet is closely tied to the build out of newer, fuel efficient aircraft and a firm defense spending backdrop. That has contributed to rising margins and earnings as higher value engine parts and fasteners gain share in each plane and jet engine. Q1 2026 revenue of US$2,313m and net income of US$580m, plus management’s full year revenue outlook around US$9.6b, indicate how aero demand and industrial gas turbines are reflected in the income statement. At the same time, a very high P/E multiple, heavy use of debt, sizeable insider selling and dependence on a few big OEM customers leave little room for disappointment. If you want to understand whether that trade off is worth it, the valuation, earnings expectations and risk discussion in the detailed company workup provide essential context.

Howmet’s rich P/E, strong aero exposure, and Q1 2026 profit profile suggest the story may be more than simple momentum, and the 2 key rewards and 2 important warning signs could reveal the twist investors are missing

Astronics (ATRO)

Overview: Astronics supplies aircraft lighting, power, connectivity and safety systems, as well as specialized test equipment, to commercial airlines, aircraft manufacturers, defense customers and electronics contractors across multiple regions.

Operations: Astronics generates most of its revenue from Aerospace at US$819.8m, supported by Test Systems at US$67.5m and a small intersegment sales adjustment of US$0.5m.

Market Cap: US$3.4b

Astronics sits in the slipstream of rising aircraft production and growing air travel, with high margin cabin power and lighting products feeding into record bookings, a sizeable backlog and higher full year revenue guidance for 2026. At the same time, a rich P/E multiple, heavy reliance on commercial aerospace cycles and tariff exposure mean earnings are sensitive to aircraft build rates, cost inflation and legal or restructuring setbacks. Test Systems has also had project execution issues, so delivery on the new U.S. Army radio test order and other programs matters for credibility. For investors who can tolerate this higher risk profile, the mix of recently restored profitability, margin expansion efforts and growing retrofit demand may be worth a closer look.

Astronics’ mix of restored profitability, margin work and retrofit demand suggests the story may be accelerating faster than the headline P/E implies, and the 3 key rewards and 2 important warning signs (1 is major!) could reveal the real swing factor hiding in its risk profile

The three stocks in this article are just a starting point, as the full Aerospace and Defense idea on Simply Wall St surfaces 67 more companies with equally compelling narratives inside the Aerospace And Defense screener. Use the platform to identify, analyze and filter for the specific catalysts and business drivers that matter to you so you can focus on the opportunities in this theme that best match your own views and criteria.

Take Control of Your Investment Journey

If Astronics 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.