In the past few years, which sector of the US stock market has risen the most? Technology? Medical? The so-called new economy?
No, no, it's a military industry.
Technology stocks are mainly the leaders who rose, but the stock prices of major US military stocks have collectively bucked the sky, and none of them fell. Look directly at the stock price chart:
The Syrian civil war that broke out in 2011 , Fired the starting gun for this round of continuous soaring of U.S. military stocks. The continued bull market in U.S. stocks, huge increases in military expenditures and successive local conflicts have continuously pushed the stock prices of military industry giants to high levels. Even after the recent adjustments, the increase is still astonishing.
Since the beginning of 2011, the stock price of Lockheed Martin, the largest military industry group in the United States, has risen 447.06%; Boeing, which has both civilian and military businesses , The stock price soared by 517.93%, and the smaller market value of Raytheon and Northrop Grumman also rose by more than 400%. The worst-performing joint technology also nearly doubled.
The ten companies in the above table are 2016 Stockholm International The top ten US military companies selected by the Peace Research Organization (SIPRI). Among the top ten military industry companies in the United States, 9 are listed companies. Looking through the financial reports of these companies, their business is not the "military industry concept stocks" familiar to the big A-shares, but rather fake weapons manufacturers or defense suppliers: direct production of aircraft carriers, fighter jets, tanks, nuclear submarines and missiles.
The ten largest military industry giants in the United States: selling private jets to the rich in China on the left, and building bombers on the right.
Since 1990, SIPRI has published in the yearbook the arms sales and employment data of the world’s top 100 largest arms manufacturers. Based on the original data, we made this picture:
From According to the latest (2016) data released by SIPRI, there are 7 companies worldwide with arms sales of more than 10 billion U.S. dollars in 2016, and 5 of them are occupied by the top ten U.S. military industry companies.
Let’s take a look at what exactly these ten major military companies do, so that they can get out of the beautiful K-line chart at the beginning of this article.
We checked the financial reports of nine of them, combined with other public information, and sketched them one by one.
1. Lockheed Martin (Lockheed Martin Corp)
At present, the world's number one weapon manufacturer, a veteran American aerospace manufacturer, was founded in 1912 and went on the market in 1961. The company's largest shareholder is STATE STREET CORPORATION (holding 16.48%).
Its products include the famous F-16 fighter jets, F-22 Raptor fighter jets, U2 reconnaissance aircraft and Trident missiles. The company’s main products are as follows:
Lockheed Martin was founded in Before the First World War, it has lasted more than 100 years. The reason why it can become the world's number one weapons manufacturer is not only the result of the two world wars, but also the continuous merger and reorganization. In 1998, Lockheed almost merged with another military company, Northrop Grumman. according toIt is estimated that if the merger can finally be completed, it will control about a quarter of the US defense weapons expenditure.
In 2016, the company’s military product sales exceeded US$40 billion. Ranked first in the world's top 100, military product sales accounted for approximately 86% of the company's total sales.
In 2016, the total arms sales of the US companies on the list accounted for a 4% increase in the total arms sales of the world’s top 100 companies compared to 2015, of which Lockheed Martin's arms sales increased by 10.7% in 2016, which played a major role in increasing the overall sales share of US companies on the list.
The financial report shows: In fiscal year 2017, Lockheed's total revenue rose to 51.048 billion U.S. dollars and net profit was 2.002 billion U.S. dollars. In the first quarter of 2018, revenue has reached 11.635 billion U.S. dollars and net profit is 1.157 billion U.S. dollars.
2. Boeing Corporation
The world's largest civil and military aircraft manufacturer, founded in 1916, is headquartered in Chicago. Listed in 1934, the current largest shareholder is The Vanguard Group (holding 7.00%).
The company designs and manufactures rotorcraft, civil and military aircraft, electronic and defense systems, missiles, satellites, launchers, and advanced information and communication systems. The company’s main products are as follows:
In 1997, the company cooperated with McDonnell Douglas After the merger, Boeing's military business expanded substantially.
McDonnell Douglas was once the largest manufacturer of military aircraft in the United States. Its representative products include the famous F-4 "Ghost", F-15 "Eagle", and C -17 military transport aircraft and so on.
The combined Boeing Company is composed of four main business groups: Boeing Financial Company, Boeing Commercial Aircraft Group, Boeing Connection Company and Boeing Integrated Defense Systems Group. Among them, Boeing Integrated Defense Systems (Boeing Integrated Defense Systems) mainly produces military aircraft, missiles and launch vehicles, and is the largest contractor of NASA. In 2016, Boeing’s military product sales were close to 30 billion U.S. dollars, ranking second in the world, with military product sales accounting for approximately 31%.
The financial report shows: Boeing's total revenue in 2017 was 93.352 billion U.S. dollars and net profit was 8.197 billion U.S. dollars. In the first quarter of 2018, net profit and revenue were 23.382 billion and 2.477 billion US dollars, respectively.
A large American defense contractor, founded in 1922 and listed in 1945, the current largest shareholder is The Vanguard Group (holding 7.89%). The company's core business is concentrated in the three areas of defense and commercial electronics, commercial and special mission aircraft, and engineering and construction.
Raytheon’s well-known products include Patriot missiles and Tomahawk missiles, but they are actually stronger in the field of radar. The main products are as follows:
Raytheon’s military product sales in 2016 More than 20 billion U.S. dollars, ranking third in the world's top 100, military products accounted for nearly 95% of sales.
According to the financial report, in 2017 Raytheon’s total revenue was 25.348 billion U.S. dollars and net profit was 2.024 billion U.S. dollars; revenue and net profit in the first quarter of 2018 reached 6.267 billion and 633 million US dollars.
4. Northrop? Grumman (Northrop Grumman Corp.)
Northrop? Grumman is the manufacturer of the famous Nimitz-class aircraft carrier and B-2 stealth bomber. It is currently a major manufacturer of aerospace vehicles in the United States.It merged with Grumman Corporation in 1994.
The company was listed in 1951, and the current largest shareholder is STATE STREET CORPORATION (holding 11.06%). Business areas include research, production and distribution of military and civilian aircraft; research and production of missiles and unmanned aerial vehicles; electronic products and provision of technical services and other fields; research and production of military electronic systems, military aircraft and spacecraft system integration, Special transportation vehicles, information and other services. The company’s recent main businesses and products include:
(1) B-2 stealth bomber, A-6 carrier-based attack aircraft, F-14 Tomcat fighter, EA-6B Electronic warfare aircraft, E-2C Hawkeye early warning aircraft
(2) Production of fire control radars for F-16 and F-22 aircraft, and longbow fire control radars for AH-64D'Longbow Apache' helicopters "Haifaer" missile, producing parts of Boeing-747 and F-18
(3) Production of guidance and navigation equipment, electronic sensors and tracking systems, automated test equipment, military electronic countermeasures, automatic detection Equipment, joint detection target attack radar system, space shuttle command assistance system, space station information and control assistance program
(4) Aluminum truck body and durable vehicle
(5 ) Improved F-5 airborne electronic equipment and YF-23 advanced tactical fighter prototype development
In 2016, sales of military products exceeded US$20 billion, ranking among the top 100 in the world Fifth, the sales of military products accounted for nearly 95%.
The financial report shows: In 2017, the company's total revenue was 25.803 billion U.S. dollars and net profit was 2.015 billion U.S. dollars; the revenue and net profit in the first quarter of 2018 reached 6.735 billion and 739 million US dollars.
5. General Dynamics Corp.
One of the US defense enterprise group, its representative products include F111 bomber, M1 tank, Ohio-class nuclear submarine, etc. Founded in 1899 and listed in 1952, the current largest shareholder is Longview Asset Management, L.L.C. (holding 11.22%).
The company’s industry is mainly divided into marine equipment (mainly manufacturing warships and nuclear submarines), aviation (including commercial aircraft and fighter jets), information systems and technology, and offensive Four major areas of weapons. In 2016, the company's sales of military products approached 20 billion U.S. dollars, ranking sixth in the world's top 100, and sales of military products accounted for nearly 60%.
It is worth mentioning that General Dynamics acquired Gulfstream Aerospace, a well-known manufacturer of luxury and large-scale business jets, expanded and adjusted the Gulfstream series of models, and later Gulfstream business jets began to be widely used in civil, commercial, government agencies, private, and military fields.
The Gulfstream series of private jets purchased by many wealthy Chinese are produced by General Dynamics. As one of the most important military companies in the United States, General Dynamics produces nuclear submarines and tanks on the left hand, and private jets sought after by the rich in China on the right hand.
The financial report shows: In 2017, the company's total revenue was 30.973 billion US dollars, and the net profit was 2.912 billion US dollars; the first quarter of 2018 revenue and net profit reached 7.535 billion and 799 million US dollars.
6. L-3 Communications (L-3 Communications)
The company went public in 1998, and the current largest shareholder is The Vanguard Group (holding 10.99%). Mainly engaged in command systems, image monitoring and communication systems. Customers mainly include US Department of Defense (DOD), US government intelligence agencies, US Department of Homeland Security (DHS), US Department of State (DoS), US Department of Justice, and domestic and foreign commercial customers, etc. .
The typical defense products of L-3 Communications Company include: SPYDR intelligence, reconnaissance and surveillance system, US Marine Corps tactical video system, EA-18G simulator and tactics Universal data link.
In 2016, L-3’s military product sales approached 9 billion U.S. dollars, ranking eighth among the world’s top 100, up two places from 2015. The company’s military products Sales accounted for nearly 85%.
The financial report shows: In 2017, the company's total revenue was 9.573 billion U.S. dollars and net profit was 677 million U.S. dollars; the revenue and net profit in the first quarter of 2018 reached 2.371 billion and 203 million US dollars.
7. United Technologies Corp. (United Technologies Corp.)
The oldest one among the ten major military industry companies. Its predecessor was established in 1850. It mainly provides high-tech products and services for the global aerospace and construction industries.
The company was listed in 1934, and the current largest shareholder is STATE STREET CORPORATION (holding 11.27%). The business area covers aero engines, helicopters, commercial aviation equipment and systems, elevators, escalators and moving walks, HVAC and refrigeration systems, fire and security equipment, building automatic control equipment and other aviation and construction industrial products.
The sales of UTC military products in 2016 were close to 7 billion U.S. dollars. Ranked eleventh in the global top 100, the company's military products sales accounted for only about 12%.
It is worth mentioning that UTC has created two firsts in our country:
In 1996, my country's first aviation joint venture-Pratt & Whitney Chengdu Aerotech was established. In 1997, my country's first wholly foreign-owned R&D enterprise-United Technology Research Center (China) Co., Ltd. was established in Shanghai.
The financial report shows: In 2017, the company's total revenue was 59.837 billion U.S. dollars and net profit was 4.552 billion U.S. dollars; the first quarter of 2018 revenue and net profit reached 15.242 billion and 1.297 billion US dollars.
8. Huntington Ingalls Industries (Huntington Ingalls Industries)
The only US manufacturer of nuclear-powered aircraft carrier tankers and a major manufacturer of nuclear-powered submarines.
The company was born in Northrop? Grumman's ship manufacturing division was spun off in 2011 and went public in the same year. It mainly designs, builds, and maintains nuclear and conventionally powered ships for the US Navy and Coast Guard, and provides after-sales services for military ships worldwide.
In addition, the company also provides services such as ship and ocean engineering, ship system assessment, maintenance engineering, logistics services, commercial nuclear power plants, nuclear energy facilities, and fossil fuel power plants. As well as providing manufacturing, construction, equipment and product sales services to private companies and institutions. The current company's largest shareholder is The Vanguard Group (holding 10.92%).
The company’s typical defense products include: Proteus mini "submarine", Arleigh Burke-class destroyer, San Antonio-class amphibious landing ship, LHA type amphibious assault ship, Virginia Class nuclear submarine, DDG1000 destroyer and LHA-7 amphibious assault ship.
In 2016, HII's military product sales approached 7 billion U.S. dollars, ranking twelfth in the global top 100, and military product sales accounted for about 95%. It is worth mentioning that the company's military sales in 2016 were only about 150 million U.S. dollars away from UTC, which ranked 11th.
The financial report shows: In 2017, HII's total revenue was 7.441 billion US dollars and the net profit was 479 million US dollars. In the first quarter of 2018, net profit and revenue were 1.874 billion and 156 million US dollars, respectively.
9. Bechtel Corp.
Founded in 1898, one of the world's largest construction and engineering companies, the fifth largest private company in the United States, and Los Alamos National Laboratory operating companyone. Bechtel Engineering is the only non-listed company among the top ten military industry companies in the United States. The company belongs to the Bechtel family.
Bechtel’s business is mainly distributed in the following 4 departments: Nuclear Safety and Environment Department, Infrastructure Department, Mining and Metals Department, Petroleum, Ministry of Natural Gas and Chemical Industry.
The Department of Nuclear Industry Safety and Environment serves US and international government agencies, including the US Department of Defense and Energy. Since its establishment, the number of nuclear power plants that the company has designed, served or delivered accounts for about 80% of the total number of nuclear power plants in the United States.
In addition, the company is particularly good at dismantling and destroying some of the world’s most dangerous chemical weapons and helping to maintain mission-critical bases for the U.S. Armed Forces. The Infrastructure Department is responsible for related business projects such as transportation, fossil and renewable energy, transmission and communications, and its scope covers highways and bridges, railways, port and aviation engineering, and hydropower facilities.
The following are some of the company’s classic construction projects:
In 2016, the company's military product sales approached 5 billion U.S. dollars, ranking 14th in the global top 100, ranking two places ahead of 2015, and military product sales accounted for The ratio is about 15%.
10. Textron Group/Textron (Textron)
The company started in the textile industry in 1923 and went public in 1947. It has now developed into a global diversified industrial enterprise. The largest shareholder is T. Rowe Price Associates, Inc. (holding 12.88%) .
At present, the company is mainly engaged in aircraft, defense, industrial and financing businesses. Its business operations are divided into five sectors: Textron Aviation, Bell, Textron Systems, and Industry and Finance. The main contents of each department are as follows:
In 1960, for Bell Helicopter The acquisition is a key node for Textron to truly begin to get involved in the aviation and defense industries. Bell is a supplier of rocket engines for NASA’s Gemini program and a supplier of propulsion systems for the production of Minuteman-3 ballistic missiles. Its most famous product is the UH-1 Huey helicopter widely used in the Vietnam War ( Huey).
Textron’s military product sales in 2016 were close to 4.8 billion U.S. dollars, ranking 15th in the global top 100, and the company’s military product sales accounted for approximately Is 35%. The company's ranking in 2016 was 4 places ahead of 2015.
The financial report shows: Textron's 2017 total revenue was approximately 14.198 billion U.S. dollars and net profit was 307 million U.S. dollars. In the first quarter of 2018, net profit and revenue were 3.296 billion and 189 million US dollars, respectively.
Not only are the top ten giants, the United States is also a global arsenal
The famous American military industry companies are not only above ten, but also occupy nearly half of the places in the top 100 arms sales in the world.
Rough statistics based on data from the Stockholm International Peace Research Agency (SIPRI): From 2002 to 2016, a total of 281 companies have entered the SIPRI Global Top 100 in 15 years On the sales list of arms sales companies, the United States ranks first in the world with 101 companies. This list does not include China's data.
Russia ranked second with 33 companies; 23 from the UK, 21 from France, and 19 from Italy ranked third to fifth respectively. Among these 281 companies, 43 companies have been on the list for 15 consecutive years, of which 18 are from the United States, ranking first. The second place is the United Kingdom, but the number of companies is only six, which is only one-third of that of the United States.
Calculate the sales of companies entering the list, 2016 The total sales of the world's top 100 military companies reached 374.8 billion U.S. dollars in 2015, an increase of 1.9% over 2015 and an increase of 38% over 2002.
This is also the SIPRI Global ArmyThe arms sales of the top 100 companies have increased for the first time after five consecutive years of decline. In the same period, US arms sales increased from US$136.29 billion in 2002 to US$238 billion in 2016, an increase of more than 74%.
The United States is actually the biggest winner of the military expenditure expansion of countries around the world in the past decade or so. The distribution of the top 100 list above is only calculated by the number of companies. If calculated by the amount, the share of US military industry companies is even higher. It is this high and continuously increasing market share that has created the continued bullishness of the US military industry.
We performed statistical calculations based on SIPRI’s original data: 2002 From 2016 to 2016, the cumulative sales of military industry companies in the United States accounted for 65% of the total global military sales, totaling more than US$3.4 trillion. The total sales of other countries (excluding China) accounted for only 35%, with a total of only 1.83 trillion. US dollars.
The US military is the largest buyer of US military industrial companies, but exports also contribute huge revenue. Statistics show that the US military exports accounted for approximately 34% of the total global military exports from 2013 to 2017, far exceeding Russia.
U.S. Military Expenditure: The Big Fund of Military Enterprises
The US military industry giant's arms sales revenue mainly comes from the huge US military expenditure. According to SIPRI's raw data calculations, the US military expenditure has long remained at about half of the global military expenditure.
After the 9·11 incident, the US military expenditure continued to grow Until 2010 and 2011, it exceeded US$750 billion for two consecutive years.
In the last 20 years, global military expenditures have continued to grow from 2000 to 2011, and have remained relatively stable since 2012. In 2017, global military spending increased by about 1% year-on-year.
After 2011, U.S. military spending has shown a downward trend, while U.S. military stocks have soared during the same period. This is largely due to the fact that military expenditures include not only the procurement of military industry, but also expenditures for participating in local wars. The changes in the income of military industry enterprises are positively correlated with changes in military expenditures, but there is a delay in time. Moreover, continuous mergers and acquisitions have allowed the market share to concentrate on the giants.
After years of rising, will the U.S. military stocks turn down because of the reduction in military spending? This question is very complicated. The U.S. military expenditure and the international situation are highly related to the development of U.S. military industrial enterprises.
In fact, due to inflated debt, military expenditures are too high. In recent years, the voice of the United States calling for cuts in military spending has increased.
September 11th Incident: Turning Point in U.S. Military Expenditure
As shown in the figure, the 9.11 incident was a turning point in US military spending. Prior to this, U.S. military spending had been declining for many years.
Nearly fifteen years before the 9·11 incident Over time, with the end of the Cold War, as the overall international situation tends to ease, government military expenditures have also shrunk sharply, and US military orders have also shown a downward trend.
In 1986, at the end of the Cold War, U.S. military expenditure was as high as $6.15 trillion; in 1999, less than ten years after the end of the Cold War, U.S. military expenditure was reduced to only 4 Trillions of dollars. If the factor of inflation is taken into account, the US military expenditures have almost been cut by half during this period.
During this period, U.S. military industry companies, driven by market competition and encouraged by the U.S. government, began large-scale mergers and acquisitions, and their revenues grew rapidly at the same time. , The industry concentration is also rising rapidly. The climax is that the two major military industry giants Lockheed Martin and Northrow Pugrumman are planning to merge.
If the merger of the two giants is finally completed, it will likely control a quarter of US arms purchases. In 1998, the U.S. Department of Defense rejected the merger because of concerns that excessive upstream concentration would reduce its bargaining power, and this wave of mergers and acquisitions came to an end temporarily.
After the 9.11 incident, the United States took the lead in launching a series of "war on terrorism." From 2002 to 2008, the demand for weapons brought about by wars in Afghanistan and Iraq greatly stimulated the production, sales and export of US military products.
Domestically, the American people's attitude towards national defense and security has changed rapidly, and it is politically correct to increase the military budget. Government spending on military purchases has also increased year by year. Affected by this, U.S. military industry companies developed rapidly at this stage. The sales growth rate of military industry products was much higher than that of U.S. GDP during the same period. The rapid development of military industry companies became one of the main driving forces of U.S. GDP growth here.
After 2008, affected by the global economic crisis triggered by the subprime mortgage crisis, the overall U.S. economy declined. On the other hand, after the Obama administration came to power, it began to withdraw its troops from Iraq, and the international situation tended to stabilize. In this general environment, US military expenditures have begun to shrink.
However, the major part of the reduction in US military expenditure is the funding for overseas wars. Major military industry giants such as Lockheed Martin's sales have remained stable in the past few years. Revenue growth in 2016 and 2017 still reached 16.5% and 8%.
Since Obama’s second term, the proportion of US military expenditure in GDP and fiscal expenditure has gradually declined.
From 2011 to 2017, US military expenditure is in GDP The proportion of fiscal expenditures decreased from 4.6% to 3.1%; the proportion of fiscal expenditures decreased from 11.8% to 8.8%
Since 2011, with The global economy is recovering and global military competition has become increasingly fierce. In order to consolidate and strengthen its military position, the United States has cut military expenditures as a whole, but has maintained a considerable military investment in research and development of cutting-edge military equipment.
On the other hand, although the international situation is generally easing, regional wars and conflicts have clearly intensified, and regional terrorist attacks have continued one after another. At present, including Syria, Iraq, Yemen, Saudi Arabia, Egypt and other countries, almost the entire Middle East region has been in continuous war for a long time, providing a large amount of market demand for global arms sales. Affected by various factors, coupled with the long-term bullish trend of U.S. stocks, U.S. military industry stocks have set new highs.
In 2016, Trump was elected President of the United States. He put forward the slogan "Rejuvenate the US Army" as early as during the election campaign, which gave the market enthusiasm for military industry stocks. Heat up again.
But recently, with the overall adjustment of US stocks, Long Bull's military stocks have also collectively fallen from their high positions. But in any case, Uncle Sam's arsenal has created one of the most powerful sectors in the capital market in the past few years.
Military industry concept stocks have also been a popular sector of large A-shares. The stone of the mountain can be used for jade, combing through Uncle Sam's account book, maybe we can see clearly what the real military sector is. (GCH)