Better Defense Stock: Lockheed Martin vs. RTX

By Courtney Carlsen – Apr 5, 2026 at 10:30AM ESTKey PointsGeopolitical tensions are resulting in significant increases in defense spending.Lockheed Martin is anchored by its F-35 aircraft and missile systems, and its backlog has surged. RTX combines defense and commercial sectors, with expertise in both missile systems and commercial aerospace engines.As global unrest escalates and active military operations unfold in Iran, defense has come into focus. Legislators are ramping up defense spending, fueling a significant rearmament drive that's reshaping the national security landscape. The defense budget is skyrocketing, with $1 trillion allocated for 2026 alone and projections exceeding $1.5 trillion for 2027. In this environment, defense stocks are catching investors' eyes. Defense stocks offer stability through reliable business models and consistent government contracts. Companies like Lockheed Martin (LMT +0.89%) and RTX (RTX +0.79%) are positioned to benefit in this environment. Here's which one stands out as a better buy today. Image source: Getty Images. Lockheed Martin is experiencing incredibly strong demand as defense budgets grow Lockheed has a strong aeronautics segment anchored by sales of its F-35 stealth combat aircraft, which provides it with a high-margin revenue stream. Because these aircraft require constant maintenance and software upgrades, like new sensors and weapon systems, these sales provide the company with earnings visibility for decades to come. The company is also experiencing strong segment growth of 14% from its missiles and the fire control business, driven by a surge in global demand for HIMARS and PAC-3 interceptors. Last month, the company signed a framework agreement with the U.S. Department of Defense (DOD) to quadruple the production capacity of the Precision Strike Missile in response to Operation Epic Fury in Iran. ExpandNYSE: LMTLockheed MartinToday's Change(0.89%) $5.50Current Price$623.14Key Data PointsMarket Cap$143BDay's Range$616.60 - $626.0252wk Range$410.11 - $692.00Volume37KAvg Vol1.9MGross Margin11.04%Dividend Yield2.17% The move builds on Lockheed's $4.94 billion contract last year, and the company now has a record backlog of $194 billion, more than 2.5 times its annual sales. As defense budgets around the world grow, Lockheed's role as a top contractor will make it a top beneficiary. RTX diversifies with defense and commercial businesses While Lockheed Martin is a pure-play defense contractor, RTX has a more diversified business that combines Raytheon's missile expertise with Pratt & Whitney's commercial aerospace engines and Collins Aerospace's avionics. This helps the company diversify through its commercial aftermarket business, mitigating the budget dependence of defense. Through Pratt & Whitney, RTX has over 85,000 engines in service both militarily and commercially. Collins Aerospace provides components like avionics and flight controls. Because these high-tech engine components are certified by the Federal Aviation Administration, RTX is often the only certified source, which provides it with a steady stream of cash flow. ExpandNYSE: RTXRTXToday's Change(0.79%) $1.53Current Price$196.25Key Data PointsMarket Cap$263BDay's Range$193.74 - $197.3452wk Range$112.27 - $214.50Volume114KAvg Vol6.3MGross Margin20.08%Dividend Yield1.39% Last August, the DOD awarded RTX a $50 billion umbrella contract to produce and sustain the Patriot missile defense system. The contract offers a 20-year firm commitment and includes the manufacturing of new Patriot fire units and radar sets, maintenance and repair of the global fleet, and supply chain management. As a result, RTX's backlog grew to $268 billion, with defense making up about 40% of this total. Both are quality defense stocks For investors weighing the two, Lockheed is good for dividend investors and a bet on a long-term structural increase in defense. It is more reliant on defense spending, and changes to future budgets could affect this business. RTX, on the other hand, is more diverse with its defense and commercial aviation businesses. While both Lockheed and RTX are high-quality defense stocks to own, if I had to pick one, I'd give RTX a slight edge due to its more diversified business model.Read NextApr 3, 2026 •By Todd ShriberWhere Will Lockheed Martin Stock Be in 5 Years?Apr 2, 2026 •By Matt DiLalloCan You Invest in SpaceX Pre-IPO? Here's What You Need to KnowMar 27, 2026 •By Catie HoganShould You Buy Lockheed Martin While It's Up 26% in 2026?Mar 23, 2026 •By Scott LevineCan You Invest in Anduril Pre-IPO?

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Before The Motley Fool, Courtney was a lead senior auditor for the State of Florida. He holds a master’s degree in accounting from the University of Florida.TMFCourtCarlsenStocks MentionedLockheed MartinNYSE: LMT$622.79(+0.83%)+$5.15RTXNYSE: RTX$196.21(+0.77%)+$1.49*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.