2 War Stocks to Buy on Rising Global Military Spending

Geopolitical tensions are reshaping investment landscapes worldwide. From Middle Eastern conflicts to contested territorial waters in Southeast Asia, and the ongoing European land war, defense budgets are surging as governments prioritize military preparedness. For investors with $500 seeking exposure to this war stocks trend, the market offers select opportunities that still trade at reasonable valuations.

While defense stocks overall have appreciated significantly, two companies—Textron (NYSE: TXT) and Huntington Ingalls Industries (NYSE: HII)—continue to represent compelling value propositions for those looking to buy war stocks at attractive entry points.

Global Military Tensions Drive War Stocks Higher

The collapse of Cold War-era geopolitical frameworks has given way to a multipolar security environment marked by rising tensions. Thirty-six years after the Berlin Wall fell, the world faces simultaneous conflicts across multiple regions: Middle Eastern instability, Southeast Asian border disputes, and the largest European land war since 1945. These developments have triggered unprecedented growth in military spending across developed nations.

For investors, this shift translates into sustained demand for defense contractors. Unlike cyclical sectors, military procurement reflects sustained government commitments, particularly as the U.S. Navy responds to an expanding People’s Liberation Army (PLA) presence in the South China Sea. The result: war stocks and defense equities remain positioned for multi-year growth cycles.

However, the sector-wide rally has inflated valuations across much of the defense industry. Most major defense contractors now command premium price-to-sales multiples, making selective stock picking essential. Fortunately, a handful of war stocks to buy still trade near historical price-to-sales ratios around 1x sales—a threshold that represents fair value in this space.

Huntington Ingalls Industries: A War Stock With Major Navy Contracts

Huntington Ingalls stands out as a primary builder of naval vessels for the U.S. Navy, specializing in nuclear-powered aircraft carriers, nuclear submarines, amphibious assault ships, destroyers, and Coast Guard cutters. The company’s stock has appreciated 8-fold since Northrop Grumman spun it off in 2011, despite revenues merely doubling—a testament to the value creation potential in the defense sector.

At a market capitalization of approximately $13.2 billion with $12 billion in annual revenue, Huntington Ingalls trades at roughly 1.1x sales. More significantly, the Navy recently announced a major contract award: Huntington will design and build a new “small surface combatant” frigate to replace the Constellation-class program previously contracted to Fincantieri.

This development carries substantial implications for long-term growth. The original Constellation program envisioned at least 20 frigates, with potential for triple that number. By awarding Huntington the replacement program, the Navy has created substantial revenue potential. Huntington’s established Coast Guard cutter design now serves as the foundation for this new frigate class—effectively securing long-term production orders and establishing this war stock as a prime beneficiary of naval modernization budgets.

Textron: Another War Stock to Consider for Value Investors

While Huntington represents the primary pick for this $500 allocation, Textron merits consideration as an alternative war stock to buy. Though less recognizable than legacy defense giants, Textron operates several major defense divisions.

Textron Aviation produces Cessna and Beechcraft military aircraft; Bell Helicopter manufactures the V-22 Osprey tiltrotor aircraft for the U.S. Marine Corps in partnership with Boeing. Meanwhile, Textron Systems develops ground combat platforms including M1117 armored vehicles, LCAC 1000 hovercraft, and the RIPSAW M5 robotic tank—acquired through the Howe & Howe subsidiary.

With a market capitalization of $15.8 billion, Textron trades at 19 times trailing earnings and 22.7 times free cash flow. Yet its price-to-sales ratio sits just under 1.1x—matching Huntington Ingalls’ valuation metric and ranking among the cheapest defense stocks by this standard.

Both companies offer entry points into war stocks at valuations that reflect fair value rather than momentum-driven premiums. For investors deploying capital into defense equities, these two options provide exposure to sustained government spending with downside protection from reasonable valuation multiples.

Why These War Stocks to Buy Remain Undervalued

In an environment where most defense stocks command premium valuations, Textron and Huntington Ingalls offer defensive characteristics alongside growth potential. Their price-to-sales ratios near 1x represent historical norms for military contractors, meaning investors purchasing these war stocks to buy today avoid the valuation excess pervading the rest of the sector.

For the patient investor with $500 available, allocating capital to proven defense contractors positioned to benefit from rising global military expenditures presents a rational response to geopolitical realities. These war stocks to buy deliver both thematic exposure and valuation discipline—an increasingly rare combination in today’s defense sector landscape.