This year has been rather disappointing for shareholders in British-based defense firm BAE Systems (OTCPK:BAESY). Year to date, the stock has lost nearly 17% of its value, despite resilient growth in its order intake during the first half of 2020.
Looking ahead, however, there are three key reasons investors should consider buying BAE Systems.
1. Defense Spending Provides Stability
The defense sector is traditionally seen as a reliable safe haven for uncertain times. But fewer and fewer major defense firms are pure plays in the sector these days. In pursuit of what had been perceived as faster-growing markets, many in the sector increasingly earn revenues from commercial and other non-defense markets. Those firms with heavy commercial market exposure now face unprecedented economic headwinds.
Unlike many of its peers, BAE still earns nearly all of its revenues producing military equipment and providing military services. This contrasts with Airbus (OTCPK:EADSY) and Boeing