Tensions between the United States and Iran have ramped up significantly in the month of July. The threat of a hot war is becoming a reality. Members of the Trump administration and hawks within the GOP establishment are now openly calling for regime change.
For these factions, economic strangulation and internal destabilization of the Iranian nation is the preferable alternative to full scale war. Whether these hardline factions are willing to wage all-out war for "regime change" is up for debate at this time.
Recent reports indicate that a U.S. strike may be closer than anticipated. ABC News reported that figures in the Malcolm Turnbull government in Australia believe the U.S. is “prepared” to bomb Iranian nuclear sites.
Most military experts accept that a war waged to usher in regime change in Iran would be far more costly than the 2003 Iraq operation.
U.S. defence stocks have performed well since the Trump administration moved to balloon in the military budget to over $700 billion this year.
Raytheon Co. (NYSE:RTN), a defence contractor that boasted over $25 billion in sales in 2017, has seen its stock climb 13.9% year over year.
Lockheed Martin Corp. (NYSE:LMT), the largest defence contractor in the world, has seen its shares increase 11% year over year. Both will see an increase in activity in the event of conflict breaking out in Iran.
For reference, Lockheed Martin stock was valued at under $50 before the U.S. invaded Iraq in March of 2003. Shares climbed to over $115 before the outbreak of the financial crisis in 2007-2008.
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