President Donald Trump may have grabbed headlines with buyback threats and a proposed $1.5 trillion defense budget, but for investors, the real question is simpler: which defense stock actually looks best priced if spending really accelerates?
With policy noise largely digested, valuation is now doing the talking for Lockheed Martin Corp (NYSE:LMT), Rtx Corp (NYSE:RTX), and Northrop Grumman Corp (NYSE:NOC).
Lockheed Martin: Execution Is Already Priced In
Lockheed trades at a market cap of about $115 billion, with a trailing P/E near 28, per Benzinga Pro data. That looks expensive at first glance, but the forward P/E drops sharply to around 17, implying investors expect earnings to grow into future contracts.
Its EV/EBITDA of roughly 17.4 puts it squarely in "steady compounder" territory. This is not a deep value play — it's a stock priced for reliable delivery if production ramps as planned.
RTX: The Premium Name With Little Margin For Error
RTX is the most expensive stock in the group. With a market cap near $249 billion, a trailing P/E above 38, and a forward P/E close to 28, expectations are already high.
Its EV/EBITDA of about 19 reflects confidence in scale and diversification, but the lower earnings yield shows investors are paying up. If defense spending surges, RTX benefits — but valuation leaves less room for surprises.
Northrop Grumman: Quietly The Cheapest
Northrop stands out in price. Its trailing P/E sits near 21, forward P/E just under 20, and EV/EBITDA below 14 — the lowest of the three. Add the highest earnings yield of the group, and Northrop looks like the most defensively priced way to play higher defense spending, especially tied to long-cycle and classified programs.
If a $1.5 trillion defense budget becomes reality, RTX looks like the premium bet, Lockheed the execution trade and Northrop the value anchor — where expectations, not headlines, are doing the least damage.
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