The United States and its NATO allies have been in a prolonged stand off with Russia to start this year. War has ravaged Ukraine’s Donbass region since the 2014 revolution that saw the ousting of former President Viktor Yanukovych. Fortunately, recent reports suggest that both sides have been re-engaged in diplomatic talks.
Investors should prepare for intensifying geopolitical conflict around the world in the years ahead. The relative decline of the United States has pushed us more towards a multipolar world order. A multipolar world order ruled in the decades before the two world wars. That period saw many great power clashes.
Lockheed Martin (NYSE:LMT) is the world’s largest defence contractor by revenue. Its shares have climbed 10% in 2022 as of close on January 26. Indeed, this defence stock has consistently performed well in the face of broader volatility.
It released its fourth quarter and full-year 2021 results on January 25. Net sales rose to $67.0 billion for the full year – up from $65.3 billion in 2020. Meanwhile, consolidated operating profit rose to $9.12 billion over $8.64 billion in the previous year.
Raytheon Technologies (NYSE:RTX) is another defence contracting giant. This stock has increased 2.3% in 2022. Its shares are up 35% from the prior year. In 2021, Raytheon delivered sales of $64.3 billion – up 14% from the previous year. Meanwhile, adjusted net income increased 74% to $6.44 billion. Free cash flow jumped 97% to $5.00 billion.
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