Textron Inc. (TXT), General Dynamics Corporation (GD), Northrop Grumman Corporation (NOC): 3 Aerospace Companies to Buy

But its combat systems segment declined 19% year over year to $1.55 billion. This is because the company had to clear backlogs for several international orders.  Overall, General Dynamics Corporation (NYSE:GD) reported a decline in its total backlog from $55.2 billion in the first quarter 2012 to $48.5 billion in the most recent quarter.  But because of new technology, more good times lie ahead.

Repurchasing plan

Northrop Grumman Corporation (NYSE:NOC) aerospace systems segment was up 4% in the first quarter. This increase was due to its F-35 program, which enjoyed higher delivery volume of its 10 major composite parts. The F-35 program produces composite parts for the jet. Under it, Northrop Grumman Corporation (NYSE:NOC) has designed and produced the aircraft’s center fuselage, radar, and other key avionics. It earned $500 million in sales last year because of the F-35 program.

Northrop is a main supplier of Lockheed Martin Corporation (NYSE:LMT), a company that designs and produces F-35 aircraft. Lockheed is expecting to deliver 100 F-35 units Australia, which is one of the eight international associates of the F-35, starting in 2014. Additionally, the Pentagon has plans to purchase an additional 29 units this year.

With the reduced defense budget, Northrop Grumman Corporation (NYSE:NOC) is facing a 3% fall in its backlog to $39.4 billion. To gain investor confidence, it plans  to use free cash flow of $3.2 billion to repurchase shares through 2015. Recently it’s total outstanding share count was around 235 million.  Its board granted approval to buy back $5 billion of stock.  In the first quarter of 2013, it repurchased 6.5 million shares at an average price of $70.15 per share.

Bottom line

With an increased number of contracts, Bell has become a key cog in the growth of Textron Inc. (NYSE:TXT).  Not only is General Dynamics growing the number of its advanced aircraft, but also the demand for those aircraft’s.  Demand is also the driving force behind growth of the F-35. That, along with a solid repurchase plan, makes Northrop Grumman Corporation (NYSE:NOC) a strong buy.  In fact, all of these companies would make solid additions to a portfolio.

The article 3 Aerospace Companies to Buy originally appeared on Fool.com.

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