While market uncertainty is on the rise, some companies operate in more certain environments than others. A few even manage to thrive when uncertainty rears higher.
Today, spending priorities are changing as global trade recedes and nation states work to reassert themselves. Countries are thinking about how they spend their money, including money on defense spending amid rising global tensions and shaken trust in alliances.
As a result, military spending is likely to increase, but in a fractured way among nation states rather than blocs like NATO. That could still bode well for defense contractors like General Dynamics (GD).
General Dynamics recently beat on earnings, and have managed to see 15% growth rates in revenue and earnings.
Even with that steady performance, shares are slightly down over the past year. But as a company in an oligopoly sector trading for less than 20 times forward earnings, shares may be a reasonable buy here.
Action to take: Long-term investors may like shares here. While the stock has been lackluster over the past year, defense contractors tend to deliver steady returns over time. Plus, at current prices, General Dynamics pays a 2.2% dividend.
For traders, the September $300 calls, last trading for about $5.60, could see mid-double-digit returns on a push higher in shares over the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.