Best Defense Stocks for August 2026: 10 Stocks for Replenishment
A countdown of ten defense companies spanning drones, missiles, shipbuilding, mission systems, aerospace, and defense services, with lower-ranked names available for closer review.
Defense stocks enter August 2026 with a durable demand narrative rather than a fleeting geopolitical trade. Governments are focused on replenishing weapons inventories, raising readiness levels, and expanding industrial capacity after recent conflicts exposed supply-chain and production constraints. The July 23, 2026 outlook increases from Lockheed Martin and RTX, which cited the Pentagon’s need to restock weapons after conflicts in Ukraine and the Middle East, reinforce the connection between current events and longer-cycle procurement. For investors, that creates a sector where budget visibility and manufacturing capacity can matter as much as headline order announcements.
The opportunity is broad, but not uniform. Munitions and missiles, air defense, command-and-control software, drones, counter-drone systems, electronic warfare, sensors, space technologies, and defense services are particularly relevant to the replenishment and modernization cycle. Prime contractors remain important because they oversee large, long-duration programs, while specialized suppliers can offer more focused exposure to propulsion, communications, autonomy, or mission software. Aerospace aftermarket businesses add another angle, combining defense demand with recurring maintenance, repair, and support revenue.
The following countdown moves from #10 to #1. It includes a mix of emerging defense-technology providers, established primes, naval specialists, mission-system contractors, and government-services companies. Each section weighs the company’s role in the defense theme alongside profitability, growth, valuation, earnings execution, and analyst sentiment. The result is intended as a research starting point: a strong defense backdrop does not remove the need to examine leverage, program risk, execution, and the price investors are paying for future growth.
Methodology brief: Our universe is limited to US-listed companies with market capitalizations above $500 million and meaningful exposure to the defense, aerospace, national-security, or military-services markets. The ranking criterion is the composite quality grade, which incorporates valuation, cash-flow-based assessment, profitability, balance-sheet measures, and related financial factors. The grades are considered alongside operating descriptions, growth metrics, earnings history, and analyst consensus so that the list is not reduced to a single ratio. This is a countdown: the best-ranked pick is reserved for #1 at the end, while lower-ranked companies still offer distinct thematic exposure.
What they do. The company develops and supports robotic and autonomous systems for government and commercial customers in the United States and internationally. Its portfolio includes small and medium uncrewed aircraft, command-and-control software, counter-UAS systems, loitering munitions, electronic-warfare products, unmanned maritime and ground systems, space hardware, laser communications, cyber solutions, and directed-energy technologies. That breadth gives AeroVironment a specialized position across autonomy, precision strike, and space-related defense applications rather than the large-platform prime-contractor model.
Why it fits. AeroVironment directly addresses several of the theme’s highest-priority areas: drones, counter-drone defenses, precision strike, artificial intelligence, command and control, and electronic warfare. Its uncrewed systems and loitering-munitions exposure are especially relevant to militaries seeking scalable capabilities and replenishment options, while its space and cyber offerings broaden the addressable mission set. The company’s international customer base also gives the business exposure beyond a single procurement account.
Numbers that matter. The financial profile is mixed: revenue was $1.98 billion, EBITDA was $194.6 million, and the net margin was -13.41%, while the gross margin was 25.3% and operating margin was 2.81%. Reported year-over-year revenue growth of 133.3% and earnings growth of 175.7% show substantial expansion in the underlying metrics, but the trailing EPS metric was -5.4. Valuation is demanding on the forward P/E of 57.8035, and the composite valuation components assigned the DCF, ROE, ROA, and P/E measures scores of 1, helping explain the overall C grade.
Recent momentum. AeroVironment’s latest completed earnings report, dated June 29, 2026, produced EPS of $1.84 versus an estimate of $1.53, a 20.3% beat. However, the company has beaten in only 2 of the 7 reported quarters in the supplied history, including misses of 7.2%, 44.3%, and 58.3% in three earlier periods. Analysts’ consensus score is 4.3684, with 6 Buy ratings and 3 Holds; the average target is $225.7669. The combination of strong thematic exposure and inconsistent profitability keeps the stock at the bottom of this countdown.
What they do. The company supplies defense and national-security technology, hardware, products, systems, and software through its Kratos Government Solutions and Unmanned Systems segments. Its offerings span satellite ground systems, command and control software, jet-powered unmanned aircraft, hypersonic and rocket systems, propulsion for drones and missiles, microwave electronics, counter-UAS and directed-energy systems, and virtual and augmented-reality training. Kratos is therefore positioned as a technology and subsystem provider serving defense agencies, classified customers, international governments, and selected commercial markets.
Why it fits. Kratos maps closely to the modernization priorities driving defense budgets: unmanned aircraft, hypersonics, rocket propulsion, missile electronics, space infrastructure, counter-UAS, and directed energy. Those capabilities can benefit from procurement efforts aimed at increasing production capacity and developing next-generation systems, rather than relying solely on traditional platforms. Its mix of government solutions and unmanned systems also provides exposure to both mission software and hardware-intensive defense technology.
Numbers that matter. Revenue was $1.52 billion and EBITDA was $87 million, with a 2.03% net margin, a 23.0% gross margin, and a negative 0.17% operating margin. Year-over-year revenue growth was 30.5%, while earnings growth was 7.4%; the trailing EPS metric was $0.17. The valuation case is aggressive, with a trailing P/E of 364.6471 and forward P/E of 97.0874. That premium contrasts with the low 1.15% ROE and 0.43% ROA, even though the balance-sheet debt-to-equity component received a Buy score.
Recent momentum. Kratos reported $0.15 of EPS on August 4, 2026, versus an estimate of $0.06, a 150.0% surprise. It has beaten estimates in all 8 of the reported quarters, with the other recent beats ranging from 9.1% to 40.0%. Analysts’ consensus score is 4.4211, based on 3 Buys and 4 Holds, and the average target is $105.6191. The reliable earnings execution is a strength, but the C+ grade reflects the tension between that momentum and a valuation that already assumes significant future progress.
What they do. Curtiss-Wright provides engineered products, solutions, and services across aerospace and defense, commercial nuclear power, process, and industrial markets. Its Aerospace & Industrial segment supplies sensors, controls, actuation, power-management electronics, and surface-treatment services, while Defense Electronics provides embedded computing, communications, avionics, instrumentation, stabilization, and weapons-handling products. Naval & Power adds severe-service equipment, nuclear-reactor components, and US Navy ship repair and maintenance, giving the company a diversified component and service position across demanding end markets.
Why it fits. The company participates in defense through the less visible but essential infrastructure behind aircraft, electronics, naval platforms, and weapons systems. Its defense-electronics portfolio supports embedded computing, tactical communications, flight testing, and stabilization, while Naval & Power contributes equipment and maintenance for the US Navy. That combination aligns with a market increasingly concerned with readiness, sustainment, and supply-chain depth, not only headline platform awards.
Numbers that matter. Curtiss-Wright generated $3.65 billion of revenue and $843.1 million of EBITDA, with a 14.81% net margin, 19.4% operating margin, and 37.7% gross margin. Its ROE was 19.75% and ROA was 8.49%, both among the stronger profitability readings in this group. Revenue growth was 5.4%, while earnings growth was 27.6% and next-year EPS is estimated at $17.1298. The forward P/E of 28.4091 is below the trailing P/E of 47.8124, but the P/E and price-to-book components each received a Strong Sell score, tempering the otherwise strong operating profile.
Recent momentum. The August 5, 2026 report delivered EPS of $3.72 versus an estimate of $3.62, a 2.8% beat. Curtiss-Wright has beaten estimates in all 8 of the reported quarters, including an 18.0% beat in May 2025 and a 10.4% beat in October 2024. The analyst consensus score is 4.2222, with 1 Buy and 3 Holds, and the average target is $806.5. The record of execution supports the B+ grade, although the elevated valuation signals that quality is already recognized by the market.
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What they do. Huntington Ingalls designs, builds, overhauls, and repairs military ships for the United States. Its Ingalls and Newport News segments cover non-nuclear vessels, aircraft carriers, submarines, refueling and overhaul work, and naval nuclear support, while Mission Technologies provides C5ISR, artificial intelligence and machine learning, cyber, electronic warfare, autonomous systems, training, and platform modernization. The business combines major ship construction with long-cycle maintenance and mission-support services, creating a concentrated but strategically important naval position.
Why it fits.HII offers direct exposure to naval readiness and the replacement or modernization of high-value US military ships. Aircraft carriers, submarines, amphibious assault ships, surface combatants, and related nuclear-support work benefit from long procurement cycles and the need to maintain fleet availability. Mission Technologies adds exposure to command and control, cyber, electronic warfare, and uncrewed systems, linking the shipbuilder to the broader defense-technology modernization cycle.
Numbers that matter. Revenue was $13.19 billion and EBITDA was $1.17 billion, with a 5.01% net margin, 7.08% operating margin, and 12.4% gross margin. ROE was 12.97% and ROA was 4.28%, while year-over-year revenue growth reached 10.9% and earnings growth reached 36.5%. The trailing P/E was 18.9279 and forward P/E was 17.5747, making the valuation more moderate than that of several specialized defense-technology names. The principal financial weakness in the composite was debt-to-equity, which received a Sell score.
Recent momentum.HII reported EPS of $5.27 on July 30, 2026, against an estimate of $3.79, a 39.1% beat. The company has beaten estimates in 7 of the last 8 reported quarters, although the earlier October 2024 quarter missed by 31.7%. Analysts’ consensus score is 3.3846, with 2 Buys, 8 Holds, and 1 Sell, while the average target is $368.0833. The A- grade reflects strong valuation and profitability inputs, balanced against leverage and the operational complexity of large naval programs.
What they do. L3Harris provides mission-critical solutions through Space & Mission Systems, Communications & Spectrum Dominance, and Missile Solutions. Its products include satellite and payload systems, missile-warning and defense capabilities, tactical radios, waveforms, satellite terminals, battlefield communications, night-vision equipment, electronic-warfare technologies, propulsion, hypersonic systems, and advanced missile technologies. The company sells integrated hardware, software, and mission systems to government, defense, civil-agency, international, and commercial customers, giving it a broad position across communications, space, and precision effects.
Why it fits. L3Harris is closely aligned with the defense market’s shift toward networked operations and higher-end sensing. Tactical communications, spectrum dominance, missile solutions, satellite systems, missile warning, and hypersonic technologies all support the need for resilient command-and-control and advanced deterrence. Its mix of communications and missile businesses also provides a way to participate in both the information layer of modern warfare and the physical systems being replenished or upgraded.
Numbers that matter. The company reported $12.86 billion of revenue and $2.146 billion of EBITDA, with a 10.37% net margin, 9.73% operating margin, and 30.4% gross margin. ROE was 8.19% and ROA was 4.24%. The supplied growth metrics show 190.0% year-over-year revenue growth but a 6.1% decline in earnings growth, so the data point to a significant gap between sales expansion and bottom-line momentum. The forward P/E was 25, compared with a trailing P/E of 28.2079; debt-to-equity, P/E, and price-to-book each received Sell scores in the composite.
Recent momentum. L3Harris reported $3.13 of EPS on July 29, 2026, versus an estimate of $2.80, an 11.8% beat. It has beaten estimates in all 8 of the reported quarters, with the latest four surprises ranging from 3.6% to 13.2%. The analyst consensus score is 4.381, based on 3 Buys and 5 Holds, and the average target is $341.7273. Consistent earnings delivery supports the case, but the B- grade reflects middling profitability and valuation signals alongside the company’s sizable debt burden.
What they do. Northrop Grumman is an aerospace and defense technology company with Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems segments. It designs aircraft and autonomous systems, strategic deterrent systems, missile-defense and precision-strike solutions, radar and electronic-warfare systems, command-and-control networks, cyber and intelligence systems, satellites, spacecraft, interceptors, and launch-related technologies. Its revenue model combines development, production, sustainment, modernization, and mission support for US and international customers across multiple high-priority defense domains.
Why it fits. Northrop offers unusually broad exposure to the structural defense priorities in this theme. Its portfolio reaches strategic weapons, missile defense, precision munitions, hypersonics, sensors, electronic warfare, command and control, cyber, space systems, and autonomous aircraft. That breadth can help the company participate in both replenishment spending and longer-term modernization programs, while its sustainment and modernization work adds an aftermarket and lifecycle dimension to major defense platforms.
Numbers that matter. Northrop generated $42.89 billion of revenue and $7.255 billion of EBITDA, with a 10.48% net margin, 11.6% operating margin, and 20.1% gross margin. Its 26.96% ROE and 7.15% ROA were among the strongest profitability measures in the group. Revenue growth was 5.1%, but earnings growth declined 5.8%, and next-year EPS is estimated at $30.4391. The trailing P/E of 18.1162 and forward P/E of 19.685 are comparatively restrained, although the composite marked debt-to-equity and price-to-book as Sell factors.
Recent momentum. The July 21, 2026 earnings report showed EPS of $7.68 versus an estimate of $6.84, a 12.3% beat. Northrop has beaten estimates in 6 of the 7 reported quarters, with additional beats of 1.3%, 3.9%, 18.7%, 19.9%, and 0.6%; the April 2025 quarter missed by 47.0%. Analysts’ consensus score is 3.96, with 4 Buys and 11 Holds, and the average target is $645.2381. Strong returns and reasonable P/E measures support the A- grade, while slower earnings growth and execution variability remain considerations.
What they do. Lockheed Martin researches, designs, manufactures, integrates, and sustains aerospace and defense systems through Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. Its products include combat and mobility aircraft, uncrewed air vehicles, air and missile defense systems, tactical and precision-strike missiles, fire-control systems, helicopters, naval and land-based mission systems, cyber and command-and-control solutions, satellites, space transportation, and strategic and defensive systems. The company primarily serves the US government and international customers, including foreign military sales contracted through the US government.
Why it fits. Lockheed is a central beneficiary of the sector’s replenishment and modernization narrative because its portfolio spans missiles, air defense, combat aircraft, space, and command-and-control systems. Its Missiles and Fire Control business is particularly relevant to restocking demand, while Space and Rotary and Mission Systems provide exposure to missile warning, radar, cyber, simulation, and integrated mission solutions. The company’s scale and broad program portfolio also give it the long-cycle visibility associated with a major prime contractor.
Numbers that matter. Revenue was $77.01 billion and EBITDA was $9.68 billion, with an 8.16% net margin, 11.96% operating margin, and 11.8% gross margin. ROE was 89.17% and ROA was 8.64%, although the unusually high ROE should be considered alongside the composite’s Strong Sell debt-to-equity and price-to-book scores. Revenue growth was 10.5%, while earnings growth was 443.8% and next-year EPS is estimated at $32.6879. The trailing P/E of 22.38 and forward P/E of 19.5313 are not extreme for a large prime, but leverage remains a key counterweight.
Recent momentum. Lockheed’s July 23, 2026 report produced EPS of $7.94 versus an estimate of $7.22, a 10.0% beat. The company has beaten in 4 of the 7 reported quarters, with a 77.3% miss in July 2025 and a 66.4% miss in January 2025 weighing on the record. Analysts’ consensus score is 3.7083, with 4 Buys, 12 Holds, and 1 Sell, and the average target is $632.9474. The B+ grade reflects strong profitability, growth, and valuation inputs, but the earnings history and balance-sheet scores argue for a measured assessment.
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This list uses a monthly screen of US-listed companies with market capitalizations above $500 million and material exposure to defense, aerospace, national security, or military-related services. Companies were ordered in countdown format from #10 to #1 according to the supplied composite quality grade, which ranges from C to A- in this selection and incorporates valuation, profitability, balance-sheet, and cash-flow-oriented measures. Primary-source company descriptions, revenue and earnings growth, margins, valuation ratios, earnings surprises, and analyst consensus were then used to explain each position and identify trade-offs. The screen is refreshed monthly, so grades, financial metrics, consensus views, and rankings can change as new data becomes available.
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