General Dynamics Corporation (GD), Textron Inc. (TXT): How To Invest In An Arms Race In Asia

However, The Boeing Company (NYSE:BA)’s expertise in the aircraft arena is undisputed. It sells such military aircraft as the world famous F-15, among many others. It has notable offerings in unmanned drones, too. This is an increasingly important arena as countries look to keep human lives out of harms way. Investors seeking a widely diversified company that would benefit from military sales to our allies would do well to look at The Boeing Company (NYSE:BA).

The Osprey Partner

Textron Inc. (NYSE:TXT) is also widely diversified. It sells helicopters, commercial aircraft, and industrial products. However, about half of its Bell Helicopter sales are to the military and its Textron Inc. (NYSE:TXT) Systems subsidiary is pretty much focused on the area. Thus, it is an important military supplier. The Osprey sale is early evidence of how arming our allies is proving a benefit.

Moreover, the company’s Textron Systems division already generates about a quarter of its sales from Asia. It isn’t much of a stretch to imagine that Textron Inc. (NYSE:TXT) would benefit from a bulking up in that region. Military sales make up around a third of the company’s top line. Paying only a token dividend, it is most appropriate for investors seeking growth.

Cold War?

There is no way to know what is going to happen as China looks to project its political power more forcefully. One thing that is certain, though, is that The United States is a world leader with regard to military technology. If our allies in the region decide that they need to spend more on their military capabilities, the above diversified companies are likely to be beneficiaries.

The article China Is Building Its War Machine: Part 2 originally appeared on Fool.com.

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