My Full Aerospace & Defense Ranking: 6 Giants For Every Portfolio

A few weeks ago, I ranked the C-Corp midstream giants. The goal was to strip away the near-term noise and find the businesses that will still be printing free cash flow a decade from now. You were generous with the feedback, and a lot of you asked me to keep writing these articles. And I gladly do that, as these deep dives deliver a lot of value for me as well. So, today, I'm applying the framework to the aerospace & defense complex: GE Aerospace (GE), RTX (RTX), Boeing (BA), Lockheed Martin (LMT), Northrop Grumman (NOC), and TransDigm (TDG). These are picked to reflect the largest players in the industry in a diversified manner. For example, I picked TransDigm instead of General Dynamics, as we already have multiple major defense contractors and no pure-play supplier. Also, I own TDG in addition to investments in GE and RTX. Based on that context, I want to be upfront about one thing before we go any further, because it shapes everything below. This is an aerospace & defense article, not a pure defense article. These six are not six identical primes. Two of them (LMT, NOC) are near-pure defense. One (RTX) is a roughly even defense/commercial blend. One (TDG) is a diversified parts supplier split across both. And two of them - GE and BA - are actually commercial-led businesses with defense as a segment rather than the main event. I could have narrowed this to the pure primes. I chose not to, and on purpose. The whole point of running TOLL across the full value chain is that it lets the framework discriminate between a sole-source prime, a capital-light aftermarket monopoly, and a distressed-but-recovering duopolist. If I only compared LMT and NOC, you'd learn far less than you will by seeing all six on the same scorecard. And the timing could hardly be better, because the macro backdrop here is the strongest of the two industries I've covered. Having said all of this, as we have a lot to discuss, let's get right to it!