With the Pentagon pressing U.S. defense companies to ramp up production after recent conflict with Iran, the sector is suddenly in the spotlight for investors who do not want to miss potential shifts in long term spending. Faster contract decisions and a proposed jump in the defense budget could reshape expectations. This article walks through three stocks exposed to this news and why each might deserve a closer look now.

The stocks highlighted below are just a starting sample, since the full screen surfaced 30 more U.S. defense and aerospace companies with equally compelling stories that are not covered in this article. To identify and analyze the highest conviction ideas right now, head straight to the U.S. Defense & Aerospace Sector screener.

Park Aerospace (PKE)

Park Aerospace is a specialist materials supplier that sits inside many of the missile and aircraft programs now drawing fresh attention from the Pentagon. The company generates about US$76 million of revenue entirely from aerospace and defense composite materials, adhesives and ablative products used in jet engines, aircraft structures and rocket motors, with a strong footprint in North America. Park Aerospace has a market cap of roughly US$819 million, which puts it firmly in small cap territory.

Investors watching the Pentagon push for faster missile and interceptor production may want Park Aerospace on their radar. Management describes demand for systems such as Patriot and LRASM as unprecedented, where Park supplies key composite and ablative materials, and recent earnings show rising sales and wider profit margins. At the same time, the stock trades on a rich P/E multiple and the company is spending more than US$50 million on new capacity while also using equity issuance, so execution and capital allocation matter. Add in index removals, a delayed 10 Q filing and a recent senior leadership change, and this is a fast evolving story that may merit closer attention rather than quick conclusions.

Park Aerospace’s expanding role in missile and interceptor programs could be masking a very different story in the background. Get the 2 key rewards and 1 important warning sign and see what might be hiding in plain sight.

Build your own defense and aerospace shortlist

Park Aerospace and the two other stocks in this article all came out of the same Simply Wall St screen, but the real value is in tailoring the filters to your own approach. Use our flexible Screener to combine valuation, growth, balance sheet and risk metrics, or jump straight into our curated Investing Ideas.

Graham (GHM)

Graham is a US engineering company that designs and manufactures complex fluid, power, heat transfer, and vacuum equipment used in chemical processing, defense, space, petroleum refining, cryogenics, and broader energy markets. Its products range from torpedo launch and propulsion systems for naval programs to rocket turbopumps and life support equipment for space applications. Graham has a market cap of about US$1.3 billion, which places it solidly in mid cap territory.

Graham may be worth a closer look if you want exposure to defense and space without owning a prime contractor. The company sits deeper in the supply chain, supplying critical hardware for submarine and torpedo programs, as well as rocket propulsion and thermal management systems. It currently reports record backlog of US$557 million with about 40% year on year growth in defense revenue in Q1 2027. That said, the stock trades on a very high P/E multiple, margins have softened with net income in Q1 2027 below the prior year, and much of the growth case rests on long dated Navy contracts and early stage bets on areas like small modular nuclear and hydrogen, which may not all play out as hoped.

Graham’s record backlog and defense exposure suggest a story that might be just getting started, yet the rich P/E hints investors may be missing something. Read the analyst forecasts for Graham to see what could shift this balance next.

Limbach Holdings (LMB)

Limbach Holdings is a building systems solutions company that designs, installs, and maintains mechanical, electrical, plumbing, and controls systems for mission critical facilities such as hospitals, data centers, research labs, and manufacturing plants across the U.S. Most of its roughly US$683.8 million of revenue comes from higher touch Owner Direct Relationships at about US$514.6 million, with the balance of about US$169.2 million tied to General Contractor Relationships. The company has a market cap of roughly US$581 million, keeping it in small cap territory.

Investors looking for a picks and shovels way into mission critical infrastructure may find Limbach Holdings worth attention. The company is leaning into recurring Owner Direct service work, energy efficiency projects, and complex data centers at the same time the Pentagon is pushing to accelerate defense related infrastructure and facilities, yet earnings pressure, lower margins and a fully debt funded balance sheet keep risk firmly on the table. The recent push into acquisitions and new regions adds another twist. If integration and execution land well, Limbach could look very different to today, especially as more defense and government customers ask for long term partners rather than one off contractors.

Limbach Holdings appears to have its recurring Owner Direct work and data center push quietly reshaping the business model, while the fully debt funded balance sheet keeps questions alive for investors. Get the Limbach Holdings financial health report

Seeking Alternatives Before The Crowd

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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.