A Trio of Top Defense Stocks for Investors: GD, ATK, NOC

We've talked a lot about recession-beater stocks here at PowerRatings.net, stocks from industries like utilities (the recession-beater industry without peer), drug manufacturers, consumer staples and personal products.

But there is another industry that investors should consider turning toward at this point in time - and the fortunes of the companies in this industry have less to do with the capacity to withstand an economic downturn and more with the necessities (perceived or real) of developing new weapons and weapons technologies in an increasingly conflicted world.

That industry, as you might imagine, is the Aerospace/Defense Products and Services industry, an industry with an Industry PowerRating of 10.

I've targeted three companies in this top-rated industry group, all with high, "consider buying" Long Term PowerRatings, all among those stocks which, according to our research, are likely to be both more reliable and better performers than the average stock after a year. Investors looking to add quality stocks to their portfolios - or even long-term traders looking for stocks with positive outlooks over the next several months - should keep stocks like these in mind.

First up is General Dynamics (GD@GD | Quote | Chart | News | PowerRating). General Dynamics has a Long Term PowerRating of 9. Stocks with Long Term PowerRatings of 9 have been higher one year later more than 79% of the time according to our research. Compare this to the average stock, which has been higher one year later less than 68% of the time.

General Dynamics is on a streak of beating analyst earnings estimates going back to January 2007. The company most recently reported EPS of 1.42, compared to analyst estimates anticipating earnings per share of 1.29. General Dynamics has a P/E of 15 and has a modest dividend yield of 1.70.

The other two defense stocks at the top of this industry include Alliant Techsystems (ATK@ATK | Quote | Chart | News | PowerRating) and Northrop Grumman Corp (NOC@NOC | Quote | Chart | News | PowerRating). Both of these stocks have Long Term PowerRatings of 8. We found that 8-rated stocks have tended to gain approximately 17% on average after one year. The average stock, on the other hand, has tended to gain between 12-13% on average over the same time period.

Alliant Techsystems has been a consistent performer come earnings time, beating analyst estimates for six consecutive quarters, most recently beating estimates by six cents. The company has a P/E of 16, pays no dividend, and is trading in the lower half of its 52-week range between 120.90 and 95.00.

Northrup Grumman, for its part, has a P/E of 13.60 and offers a dividend yield of 2.40. The company has produced four consecutive earnings beats, going back to the fall of 2007.

Looking for more long-term solutions to your investing problems? Don't let the volatility of this market lead you to miss out on stocks you'll be glad to have bought a year from now.

Learn what you need to know as an active investor looking to invest in companies with a history of financial strength and a track record for growth. Click the link above or call us at 888-484-8220 extension 1 to get your copy of the "5 Secrets to Successful Stock Investing" today!

David Penn is Senior Editor at PowerRatings.net.