Global markets are being pulled in several directions by oil supply risks, evolving central bank paths, and mixed inflation signals, which keeps attention firmly on businesses tied to security, infrastructure, and long-cycle projects. The Aerospace And Defense screener filters for companies that manufacture or provide services to this sector, helping you focus on businesses exposed to government contracts, long-term programs, and specialised expertise. This article highlights 3 notable stocks from that screener, using current macro themes such as energy costs, fiscal support, and shifting rate expectations as a backdrop for thinking about risk, resilience, and potential opportunities.

Saab (OM:SAAB B)

Overview: Saab is a Swedish defense and security group that supplies fighter aircraft, submarines, radars, missiles, training systems, and consulting services to military and civil customers across Europe, North America, Asia, and other regions. Its businesses span aeronautics, underwater systems, electronic surveillance, and technology consulting, giving Saab exposure to both large hardware programs and recurring service work.

Operations: Saab generates most of its revenue from Surveillance (SEK 28.97b), Dynamics (SEK 21.16b), and Aeronautics (SEK 19.81b), with additional contributions from Kockums (SEK 9.93b) and Combitech (SEK 5.16b), and Sweden and the rest of Europe together providing the largest geographic revenue base.

Market Cap: SEK 322.7b

Saab deserves a close look because it sits at the intersection of rising defense demand, European security priorities, and a growing stream of long-term contracts in submarines, radar, and fighter programs. Recent multidecade submarine orders with Poland, radar and missile deals across NATO allies, and moves into AI enabled command systems point to a business increasingly anchored by large backlogs and higher value technology. At the same time, Saab’s high P/E multiple, reliance on government buyers, and the need for heavy upfront investment in new plants and R&D mean execution and policy shifts are important. For investors, the tension between strong growth expectations, funding structure, and pricing is a central consideration.

Saab’s high P/E and heavy investment needs often mask the full picture. Go beyond the headline multiple with the DCF valuation analysis for Saab to see whether growth expectations or execution risks matter more.

HEICO (HEI)

Overview: HEICO is a US based aerospace and defense company that focuses on replacement parts, repairs, and niche electronic components for commercial airlines, defense customers, and other industries, helping reduce maintenance costs versus original equipment manufacturers. Through its two main groups, it supplies everything from jet engine parts and thermal insulation to advanced electro optical, RF, and power electronics systems.

Operations: HEICO generates most of its revenue from the Flight Support Group at about US$3.4b, with the Electronic Technologies Group contributing around US$1.6b, partially offset by intersegment eliminations.

Market Cap: US$42.3b

Investors looking at HEICO are getting a pure play on aftermarket aerospace demand at a time when aging fleets, cost pressure on airlines, and an expanding defense electronics footprint are influencing earnings and financial performance. The company combines earnings growth forecasts, high quality earnings, and a long history of bolt on acquisitions, supported by an expanded credit facility of up to US$3b to continue buying specialist electronics businesses. The flip side is a rich valuation, high debt funding, and reliance on acquisitions to sustain momentum. That mix of strengths and pressure points makes HEICO a useful case study in how much to pay for durable cash generation in aerospace and defense.

HEICO’s rich valuation and acquisition engine often look inseparable. The real question, however, is how durable its cash generation and pricing power are, which is exactly what the analysis report for HEICO starts to unpack.

Thales (ENXTPA:HO)

Overview: Thales is a French group that supplies defence systems, cybersecurity, aerospace equipment, satellites, and digital identity solutions such as banking security and biometric IDs to governments and corporations worldwide. Its mix of secure communications, avionics, air traffic control, and digital identity makes Thales a key contractor across defence, air travel, and critical digital infrastructure.

Operations: Thales generates most of its revenue from Defence at €12.6b, followed by Aerospace at €6.1b and Cyber & Digital at €4.0b, with smaller items grouped under Other, while France and the rest of Europe together form its largest regional revenue base.

Market Cap: €48.8b

Thales stands out in aerospace and defence because it combines large, long term defence programs with high margin cybersecurity and digital identity. This provides exposure to both hardware and recurring software backed revenues. Earnings and margins have improved, analysts see further earnings growth into the next few years, and one major bank recently lifted its price target after new contract wins in radios, healthcare identity, and European digital IDs. At the same time, Thales faces clear risks, including reliance on government budgets, execution challenges in Cyber & Digital, and an exceptional charge tied to the cancelled German F126 frigate program. Understanding how those drivers and risks interact is important for investors considering Thales.

Thales appears to combine long term defence programs with high margin digital identity, yet many investors may not be fully recognizing its earnings path. The analyst forecasts for Thales highlights what current expectations might be missing.

The three stocks here are just a starting point, and the full Aerospace And Defense screener surfaced 296 more companies with equally compelling Aerospace And Defense stories waiting to be analysed. Use Simply Wall St to unlock filters around contract visibility, balance sheet strength, and earnings quality so you can identify and analyze potential opportunities for your own portfolio.

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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.