Key Points

Howmet Aerospace may not rank as the top defense stock to purchase, yet several factors support interest in this company.
The shares have risen 500 percent across the past three years.
Howmet is not a pure-play defense name, but it operates effectively across several areas.

Trying to identify the best or smartest stocks resembles chasing an ideal that keeps shifting. Investors often sense they are targeting a moving objective.

Adjusting goals from smartest to smart broadens the range of options. This group includes Howmet Aerospace (NYSE: HWM). The aerospace name has delivered a strong three-year performance, advancing 500 percent and outperforming major industrial, aerospace, and defense exchange-traded funds during the period.

There are multiple reasons Howmet Aerospace stands out as a sensible selection among industrial names. Image source: Getty Images.

Given Howmet's role as a strong compounder in recent years, investors could question whether it remains the smartest aerospace and defense choice at present. That hesitation is reasonable. While Howmet may not claim the top spot in this sector today, it still represents a prudent option. The following points explain why.

Focusing on Howmet

Howmet does not focus solely on defense, yet it serves as a sensible holding because it manages exposure across aerospace and defense markets effectively. In practice, the firm participates in three areas: commercial aircraft engine components, defense equipment, and industrial gas turbines. This setup provides several sources of revenue.

Further, the diversification supports growth in each area. During the latest reported quarter, defense posted the slowest sales rise at 13 percent, while commercial aerospace and gas turbines recorded gains of 48 percent and 39 percent, respectively.

Defense involvement still adds to the case for considering Howmet. The company acts as a key supplier for programs such as the F-35 Lightning II, known as the Joint Strike Fighter, along with other fighter aircraft. In short, the military planes that rely on Howmet components depend on those parts to operate.

Another element supporting Howmet as a sound defense holding is that it does not compete directly for government contracts like Boeing or Lockheed Martin. Instead, Howmet maintains an essential supply position with a wide competitive advantage. Although defense is not the fastest-expanding segment, it contributes positively to the overall investment case.

Howmet Delivers Solid Results

In addition to solid revenue expansion across its three segments, Howmet presents further attributes that reinforce its appeal among industrial stocks. These include an A-minus credit rating, steady debt reduction, and double-digit free cash flow margins.

Such features underpin a solid balance sheet. Howmet's net leverage stands at 0.9 times, and the firm continues to return capital to owners. It distributed 450 million dollars in the first quarter, and its dividend growth streak now extends five years. With a modest payout ratio of 10.7 percent, meaningful room remains for future increases.

Overall, while the label of smartest can vary by perspective, Howmet qualifies as a sensible selection for those seeking a well-founded industrial stock that offers growth potential and a resilient balance sheet. That combination proves sufficient for many investors.

Should Investors Consider Howmet Aerospace Shares Now?

Before purchasing Howmet Aerospace shares, review the following information.

The Motley Fool Stock Advisor team recently highlighted what they view as the 10 strongest stocks for investors to acquire at this time, and Howmet Aerospace did not appear on that list. The 10 selections identified could deliver substantial returns in upcoming years.

For context, when Netflix appeared on a prior list in December 2004, a 1,000-dollar investment at the time of the recommendation would now equal 417,305 dollars. Similarly, when Nvidia featured on a list in April 2005, the same initial investment would now total 1,293,148 dollars.

It is also worth noting that Stock Advisor's overall average return reaches 936 percent, which exceeds the 209 percent return of the S and P 500. Review the current top 10 list through Stock Advisor and join a community of individual investors.

Stock Advisor returns as of June 21, 2026. Todd Shriber holds no positions in the stocks discussed. The Motley Fool maintains positions in and recommends Boeing and Howmet Aerospace. The Motley Fool recommends Lockheed Martin. The Motley Fool follows a disclosure policy.

The views and opinions stated here belong to the author and do not necessarily represent those of Nasdaq, Inc.