The Top 100 Contractors Report (TCR 100) is a list prepared annually by the General Services Administration as part of its monitoring of the United States. It includes the top 100 contractors in the U.S. UU. In 2024, the five countries that spent the most on their armed forces were the United States, China, Russia, Germany and India, according to data from the Stockholm International Peace Research Institute.
As a Defense Contractor Attorney near Pawley's Island SC, I am familiar with the importance of these top contractors and their role in national defense. Honeywell has numerous defense contracts with government agencies around the world, including in its country with the United States Department of Defense (DoD) and the United States Armed Forces. In May 2025, the company's JetWave X satellite communication system was selected for use on the U.S. Army's advanced ARES aircraft. As expected, roughly half of Lockheed Martin's annual sales go to the U.S. Department of Defense.
However, governments around the world have purchase contracts with the company to supply their militaries with defense products, such as F-16 and F-35 combat aircraft. In April 2025, the Royal Norwegian Air Force received the last two F-35 combat aircraft out of the 52 ordered in its most recent supply contract. While it has more shares than ITA, with 57, it also has a higher expense ratio of 0.58 percent. Unlike ITA, Honeywell is listed among the main shares of the Invesco Aerospace & Defense ETF, in addition to the other most important U.S.
defense stocks. DFEN has the highest expense ratio on this list, at 0.95 percent. Some of the most weighted shares of its 39 shares are Boeing, Lockheed Martin and RTX. Defense companies derive most of their revenue from a single customer: the U.S.
Fortunately, that customer has a lot of money and a long history of paying their bills. The stability of the federal government provides defense companies and investors with some predictability when it comes to managing cash and projecting growth. Companies in the defense sector offer a wide range of products and services to their main customers, and some are better investments than others. Here's what you need to know about investing in the defense sector and how to choose where your money should go.
Let's take a closer look at these prominent companies. Lockheed Martin (LMT +0.15%) is the largest defense company in the world and the United States is also the prime contractor of the F-35 Joint Strike Fighter, the most expensive aircraft in world. Lockheed's legendary Skunk Works research center in California is world renowned. The company has harnessed its research capacity to become a leader in advanced combat aircraft, high-tech missiles and cutting-edge electronics.
Boeing (BA +0.42%) is best known for its commercial aircraft, but its defense business, although it represents only a third of the company's total revenues, is large enough to be among the most important in the sector. Boeing manufactures several planes and helicopters for the Pentagon and participates in space activities. The company's defense business has also diversified into autonomous submarines and other products. Northrop Grumman (NOC +1.16%) is responsible for stealth bombers and has an extensive space portfolio.
The company is closely linked to the nuclear triad, a combination of nuclear missiles, bombers and submarines capable of counterattacking if the nation is attacked. Northrop is the second largest independent defense contractor and, in previous years, it was sometimes overlooked in favor of by Lockheed Martin. However, Northrop Grumman's portfolio is more closely linked to the Pentagon's main priorities, including the triad, making it a good option for investors looking for predictable growth in the coming years. General Dynamics (GD +0.84%) is one of the two leading military shipbuilders and has a portfolio of tanks and land vehicles, making it one of the leading suppliers in the U.S.
General Dynamics also has one of the largest IT and services companies focused on defense, giving it some revenue stability at a time when the Pentagon is reducing equipment purchases. Ship construction is complex and individual ships can take years to complete, leading to some inconsistency in quarterly revenues. General Dynamics tries to compensate for that instability with its IT business, which is more predictable, but investors should know that the combination of companies can make it difficult to predict quarterly results. The nightly headlines highlight global unrest, with the Russian invasion of Ukraine and recurring questions about stability in the Middle East. Defense actions tend to move upward at the start of a new conflict, but they rarely maintain those gains.
Investors should understand that defense projects usually have deadlines of several years, which does not lend itself to a rapid increase in revenues, even when demand is in ALZA. Large defense contractors generate much better margins in the research and development (R&D) of new advanced weapons systems than with the sale of missiles or ammunition all at once. If governments stopped focusing on research to finance active operations, conflicts in Europe and the Middle East could damage defense reserves. However, given the importance of research, that seems unlikely.
In the longer term, the impact could be more substantial. These conflicts are likely to increase defense sales in the coming years as weapons shipped to Ukraine and Israel are replenished, and as U.S. allies in Europe and elsewhere seek to strengthen their military power. The defense sector is more than just weapons used on land, sea and air. It is more broadly defined as companies that primarily supply the Pentagon or other government agencies. The defense sector tends to be a stable group of companies with some failures and some notable ones.
Here are some tips for evaluating individual defense companies. Early in the year, the Pentagon sends a funding request to Congress, which then holds hearings to discuss priorities and make final allocation decisions during the spring and summer. An investor doesn't need to hold on to every word. However, the budget request, available on the Pentagon's website, and comments elsewhere may provide clues as to which multi-million dollar programs are the administration's priorities. Defense companies know that investors focus on these metrics and often provide relevant information in quarterly earnings reports or conference calls.
Investing in defense stocks has advantages and disadvantages. Here are some of the factors to consider before including them in your portfolio. Explore major nuclear energy stocks to observe and discover the key benefits and risks of investing in this rapidly growing sector. Cybersecurity is a long-term challenge, but we've cracked the code of six worthwhile ETFs that specialize in keeping data safe. Clean energy is the future, and these companies are leading the way.
These companies create drugs and treatments for some of the biggest medical problems of our time. Defense companies manufacture lethal products and may participate in support operations or in gathering information that some consider disturbing. Some investors do not want to support these activities and may prefer to avoid becoming shareholders in defense stocks. Like many industrial companies, defense stocks tend to be more profitable than high-level technological or biotechnology stocks. But that also means that they are less volatile than some sectors.
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The Pentagon has exhausted some of its weapons arsenal in recent years, which should generate significant demand for missiles and other RTX products in the coming years. The company also benefits from its business activity, which has enjoyed a multi-year cycle of strong demand for spare parts to keep the existing aviation fleet afloat. The company has spent most of the decade rationalizing its portfolio and investing in new technologies. Today, it is a major supplier of tactical reconnaissance and communication systems, night vision equipment and complex space sensors, as well as other electronic products of defense.
AeroVironment (AVAV -1.03%) is a leader in drones and has developed a sophisticated line of small and medium-sized aircraft that have proven to be invaluable in the war in Ukraine. This conflict has been a proof of concept for AeroVironment, since it has brought the company into the spotlight of military buyers from the Pentagon and, in the case of the United States. In the US, AeroVironment is still in the early stages of its growth cycle. In 2025, the company acquired BlueHalo to increase its presence in the market for larger drones and systems autonomous hydraulics and space technology.
For most of its history, the defense industry's primary specialty was metal bending. Only a few companies on Earth could build huge battleships, bombers and tanks. However, in this sector, as in the rest of the world, they increasingly value not the companies that forge steel, but those that provide the brains that compose it. Defense electronics and cybersecurity represent an increasing part of the portfolio of almost every company.
That's where a lot of domestic investment is going right now. Defense IT also remains a priority, as vendors strive to provide the Pentagon with secure networks and data-rich communication systems. Leidos Holdings (LDOS +1.50%) is the largest government information technology (IT) company. It has also actively expanded into the hardware sector, providing the electronics and brains of autonomous ships and creating a strong portfolio of classified research capabilities aimed at space and intelligence communities.
The effort to make government more efficient carries risks and rewards for these IT companies. Leidos and other IT companies specialize in providing services that were previously provided internally at a lower cost, which could create opportunities. However, government enforcement agencies seeking to reduce overall costs will look closely at these contracts for ways to save. Latest news coverage from federal and government contracting companies General Dynamics' wide range of products and services, from combat vehicles to computer solutions, makes the company indispensable to the industry of the defense.
In 2024, the company continues to excel in offering innovative solutions that address current and future defense needs, especially for the U.S. L3Harris Technologies excels in providing communication systems and electronic warfare solutions to defense customers. Its focus on addressing complex challenges with advanced technology makes it the U.S. partner of choice.
In 2024, L3Harris will continue to expand its capabilities, especially with regard to tactical communications and network modernization initiatives. Formerly known as Huntington Ingalls Industries, HII is the largest military shipbuilding company in the United States. Their role in building and maintaining the naval fleet is crucial to national security. In 2024, HII's experience in nuclear-powered submarines and aircraft carriers guarantees its leading position in government contracting.
Leidos specializes in the healthcare and civil sectors, national, commercial and international security, digital modernization and defense, and offers a wide range of services and solutions. The company's work on IT modernization and cybersecurity is particularly notable in 2024, reflecting its adaptation to emerging threats and challenges. Booz Allen Hamilton is recognized for its technology and engineering services in the defense, national security and civil sectors. In 2024, the company's focus on digital transformation and data analysis positions it as a leader in providing information and strategic solutions.
For contractors and executives, Booz Allen Hamilton exemplifies the power of harnessing technology to drive success and organizational impact. Amentum operates in several sectors, including defense, energy and environmental solutions. Amentum's commitment to operational excellence and strategic growth is evident in its 2024 projects. Amentum went public in 2024 after its merger with Jacobs.
The government contractors of 2024 show the nuanced combination of innovation, strategic partnerships and technological advances needed to meet national security needs and public service. For government agencies, contractors and GovCon executives, understanding these actors lays the foundation for informed decision-making and strategic planning. ExecutiveBiz follows the executive-level business that drives the government contracting sector. Through interviews with executives, top policy news and business news, ExecutiveBiz keeps abreast of what is shaping the industry and how GovCon leaders are positioning their companies to succeed in tomorrow's federal business.
In keeping with Executive Mosaic's commitment to covering all aspects of GovCon, ExecutiveBiz also helps to provide a more complete picture of the government contracting sector, as it presents news about medium-sized companies and important developments in state and foreign contracting. If it's a business activity that affects hiring operations and success, ExecutiveBiz has you covered. The military contractor landscape is a dynamic and competitive landscape, in which defense companies compete for lucrative contracts with the United States. Defense contractors are critical to ensuring that military forces are equipped with the latest innovations, from advanced missile defense systems to state-of-the-art aircraft carriers.
Booz Allen Hamilton is a key player in the defense industry, offering services focused on digital transformation and data analysis designed for defense and national security. In 2024, its ability to integrate advanced technologies across its product line and collaborate effectively with other defense giants consolidates its position among major contractors. RTX, formerly known as Raytheon Technologies, is a key player in the defense industry, especially recognized for its innovations in missile defense systems. This new leadership is expected to bring new perspectives and drive innovative advances in Boeing's military aviation projects, reinforcing its position as one of the leading defense contractors.
According to Defense News, recent RTX contracts for the Patriot missile system have significantly increased its position in the defense sector. Both were suppliers of sensors and defense electronics that hoped to use their combined scale to better compete against larger contractors for top positions in defense contracts. Defense contractors are the backbone of this industry and are responsible for designing, developing and manufacturing a wide range of military equipment, vehicles and systems. In short, defense contractors are indispensable to the defense industry, providing the expertise and technology needed to maintain a strong and responsive military force.
The actors in this area are usually defense contractors who design and manufacture airplanes, satellites, electronic systems, software, missiles, drones, autonomous vehicles, tanks and marine vessels. As for its defense business, in March 2025, Boeing reported that production of its air defense systems, the Patriot Advanced Capability-3, reached an all-time high in 2024. Defense contractors will meet with government decision makers to discuss what lies ahead in terms of technological innovation. Discover the technological innovations coming for the country's largest defense contractors at the Defense R&D Summit 2025, hosted by the Potomac Officers Club January 1st.
