Defense Stocks Screener Excel: Track Aerospace and Military Stocks During Geopolitical Tensions (2026)

Defense stocks screener excel tools have become essential for investors navigating one of the most turbulent geopolitical environments in recent memory. As of March 26, 2026, markets are under significant pressure — oil has surged to $93.48 per barrel, up 3.5% on escalating Iran tensions, the VIX fear index has spiked to 27.53 (up 8.69%), and a broad chip selloff triggered by a Google quantum computing breakthrough is rattling the tech sector. In this environment, defense and aerospace stocks represent a sector that historically benefits from exactly the kind of uncertainty we are witnessing today. This comprehensive guide walks you through building a professional defense stocks screener in Excel using MarketXLS formulas, complete with a composite scoring system, geopolitical scenario analysis, portfolio allocation tools, and downloadable templates that you can start using immediately.

Whether you are a portfolio manager looking to tilt toward defensive sectors, a retail investor researching aerospace stocks, or an analyst building a defense sector model, the spreadsheets and methodology covered here provide a structured, data-driven framework for evaluating the ten most prominent defense contractors trading on U.S. exchanges.

Defense Stocks at a Glance: The March 2026 Snapshot

Before diving into the screener methodology, here is a quick comparison of the ten defense stocks covered in this analysis. All data points shown below are hypothetical examples for educational illustration — in the live MarketXLS template, these values update automatically.

The composite score ranges from 0 to 100 and incorporates valuation, momentum, income generation, quality metrics, and risk factors. We will break down exactly how this scoring model works in the sections that follow.

Why Defense Stocks Now: The Geopolitical Case

Escalating Global Tensions

The current geopolitical landscape presents a confluence of risk factors that historically correlate with defense sector outperformance. Iran tensions have escalated significantly, driving crude oil above $93 per barrel and raising the specter of broader Middle Eastern conflict. European NATO allies continue to increase defense budgets in response to ongoing security concerns, with several countries now exceeding the 2% of GDP spending target for the first time. Meanwhile, U.S.-China technology competition has intensified, particularly in semiconductor restrictions and cybersecurity domains.

Historical Defense Sector Performance During Conflicts

Analysis of historical data reveals a consistent pattern: defense stocks tend to outperform the broader market during periods of geopolitical uncertainty. During the initial phases of major geopolitical events — whether the Gulf War, post-9/11 period, or the Ukraine conflict beginning in 2022 — defense contractors have generally seen elevated order books, accelerated procurement timelines, and improved earnings visibility.

This is not to suggest that defense stocks always go up during conflicts. The relationship is nuanced. Prolonged conflicts can lead to budget fatigue, supply chain disruptions, and political pressure to reallocate spending. However, the initial phase of heightened tension typically provides a tailwind for the sector.

Defense Budget Trends

The U.S. defense budget has been on an upward trajectory, with the fiscal year 2026 request exceeding $900 billion. This represents a significant increase from prior years and reflects bipartisan support for maintaining military readiness. Key areas of growth include:

• Hypersonic weapons and missile defense — benefiting LMT, RTX, and NOC
• Naval shipbuilding — directly supporting HII and GD
• Unmanned systems and drones — driving growth at KTOS and NOC
• Nuclear modernization — a primary revenue driver for BWXT
• Cybersecurity and IT services — core business for LDOS and LHX
• Next-generation fighter programs — involving LMT, BA, and NOC

For a deeper look at how sector analysis works in Excel, see the MarketXLS sector analysis tools.

The Defense Stock Scoring Framework

The screener uses a composite scoring model that evaluates each stock across five dimensions. This systematic approach removes emotional bias and provides a consistent, repeatable methodology for comparing defense stocks.

Value Component (25% Weight)

The value score examines traditional valuation metrics to identify stocks trading at reasonable prices relative to their fundamentals.

• P/E Ratio: Lower P/E ratios score higher, with the ideal range being 12-20 for defense contractors. Stocks with no earnings (like BA currently) receive a penalty.
• Price-to-Book (P/B): Lower P/B ratios indicate potentially undervalued assets. Defense companies with significant tangible assets (shipyards, manufacturing facilities) may trade at lower P/B ratios.

The scoring formula normalizes these values on a 0-25 scale. A stock with a P/E of 15 and P/B of 2.0 would score near the maximum, while a stock with a P/E of 80+ would score near zero on this component.

Momentum Component (25% Weight)

Momentum captures the stock's recent price action and technical positioning.

• RSI (Relative Strength Index): The optimal RSI range is 50-70, indicating positive momentum without being overbought. Stocks with RSI below 30 (oversold) or above 70 (overbought) receive lower scores.
• YTD Change %: Positive year-to-date performance contributes to the momentum score. Stocks showing strong YTD gains like KTOS (+22.56%) and BWXT (+14.32%) score well on this metric.

Income Component (20% Weight)

For investors seeking income alongside capital appreciation, the dividend yield is a critical factor.

• Dividend Yield: Higher yields score better, with the scale calibrated so that a 2.5%+ yield earns near-maximum points. Note that BA and KTOS currently pay no dividend, which significantly impacts their income scores.

Defense stocks are generally regarded as reliable dividend payers, with many of the large-cap names maintaining decades-long dividend growth streaks.

Quality Component (20% Weight)

Quality metrics assess the underlying business strength and management effectiveness.

• Return on Equity (ROE): Higher ROE indicates efficient use of shareholder capital. LMT's ROE of 68.5% reflects its capital-light business model with significant government contracts.
• Operating Margin: Higher margins suggest pricing power and operational efficiency. BWXT's 15.8% operating margin is among the highest in the group, reflecting its specialized nuclear technology niche.

Risk Component (10% Weight)

The risk score penalizes stocks with higher volatility and leverage.

• Beta: Lower beta stocks score higher, as they exhibit less volatility relative to the market. NOC (0.65) and GD (0.68) are among the lowest-beta names in the group.
• Debt-to-Equity Ratio: Lower leverage is preferred, though defense companies often carry moderate debt levels due to the capital-intensive nature of their business.

Building the Screener with MarketXLS

The power of this defense stocks screener comes from MarketXLS Excel functions that pull live market data directly into your spreadsheet. Here is how to implement each component.

Pulling Live Price Data

The foundation of the screener is real-time price data. In your Excel spreadsheet with MarketXLS installed, use these formulas:

=Last("LMT")          → Current price for Lockheed Martin
=Last("RTX")          → Current price for RTX Corp
=Last("NOC")          → Current price for Northrop Grumman

Each =Last() function returns the most recent trading price, ensuring your screener always reflects current market conditions.

Fundamental Data Functions

For valuation and quality metrics, MarketXLS provides dedicated functions:

=PERatio("LMT")              → P/E ratio
=PriceToBook("LMT")          → Price-to-book ratio
=DividendYield("LMT")        → Current dividend yield
=MarketCapitalization("LMT") → Market capitalization
=ReturnOnEquity("LMT")       → Return on equity
=OperatingMargin("LMT")      → Operating margin
=TotalDebtToEquity("LMT")    → Debt-to-equity ratio

Technical Indicators

For the momentum component of the scoring model:

=RSI("LMT")                        → Relative Strength Index
=SimpleMovingAverage("LMT",50)     → 50-day simple moving average
=ChangePercentYTD("LMT")           → Year-to-date price change percentage
=Beta("LMT")                       → Beta coefficient

Price Range and Volume Data

To understand where each stock trades relative to its range:

=FiftyTwoWeekHigh("LMT")     → 52-week high price
=FiftyTwoWeekLow("LMT")      → 52-week low price
=Volume("LMT")               → Current trading volume
=AverageDailyVolume("LMT")   → Average daily trading volume

Building the Composite Score Formula

Once you have all the data populated via MarketXLS functions, the composite score can be calculated using standard Excel formulas. Here is a simplified version of the scoring logic:

Value Score (0-25):
=MIN(25, MAX(0, 25*(1-(PERatio-10)/40) + 25*(1-(PriceToBook-1)/10))/2)

Momentum Score (0-25):
=MIN(25, (IF(AND(RSI>=50,RSI<=70),25,MAX(0,25-ABS(RSI-60))) + MIN(25,YTDChange*1.5))/2)

Income Score (0-20):
=MIN(20, DividendYield * 8)

Quality Score (0-20):
=MIN(10, ROE*40) + MIN(10, OperatingMargin*80)

Risk Score (0-10):
=MAX(0, MIN(10, 10*(1.5-Beta)))

TOTAL = Value + Momentum + Income + Quality + Risk

This scoring approach can be fully customized. You might adjust the weights to emphasize income if you are building a retirement portfolio, or increase the momentum weight if you are looking for tactical trading opportunities. For more on building custom screening models, visit the MarketXLS functions library.

Geopolitical Scenario Analysis

One of the most valuable features of the defense stocks screener template is the geopolitical scenario analysis sheet. This framework helps you think through how different geopolitical outcomes might affect your defense stock positions.

Scenario 1: Iran Escalation

In this scenario, military conflict escalates in the Middle East, potentially involving direct U.S. military engagement. Oil prices surge above $100 per barrel, and defense spending receives emergency supplemental appropriations.

Expected impact: Strongly positive for most defense contractors, particularly those with missile defense systems (LMT, RTX), intelligence and surveillance capabilities (NOC, LHX), and drone/unmanned systems (KTOS). Boeing would see mixed effects — defense segment benefits offset by commercial aviation headwinds from higher fuel costs.

Scenario 2: Ceasefire and De-escalation

A diplomatic breakthrough leads to reduced tensions. Oil prices retreat, and the defense premium built into stock prices fades.

Expected impact: Moderately negative for defense stocks in the short term, as the "geopolitical premium" evaporates. However, underlying defense budget trends remain intact, limiting downside. Stocks with strong commercial exposure or diversified revenue streams (RTX, GD) would be relatively more resilient.

Scenario 3: NATO Expansion and European Rearmament

European allies accelerate defense spending, exceeding 2.5% of GDP targets. Major procurement programs are awarded to U.S. defense contractors.

Expected impact: Strongly positive for companies with significant international sales exposure. LMT benefits from F-35 orders, RTX from Patriot missile systems, and NOC from Global Hawk and other surveillance platforms. This scenario represents perhaps the most bullish long-term thesis for the defense sector.

Scenario 4: Tech War Escalation

U.S.-China technology competition intensifies, with expanded semiconductor export controls, cybersecurity mandates, and increased spending on electronic warfare capabilities.

Expected impact: Particularly positive for cybersecurity-oriented defense firms (LHX, LDOS) and companies involved in electronic warfare and advanced sensors (KTOS, NOC). Traditional hardware-focused companies see more modest benefits.

The template includes all seven scenarios with impact ratings from -3 (very negative) to +3 (very positive) for each stock, allowing you to model different portfolio outcomes based on your geopolitical outlook.

The Template: Six Sheets for Complete Defense Sector Analysis

The downloadable Excel template includes six purpose-built sheets, each addressing a different aspect of defense stock analysis.

Sheet 1: How To Use

This introductory sheet provides setup instructions, explains the scoring methodology, and includes links to MarketXLS and the demo booking page. If you are new to MarketXLS formulas, start here.

Sheet 2: Defense Screener Dashboard

The core of the template. This sheet features:

• Input cells (highlighted in yellow) for risk tolerance (1-10 scale) and total portfolio size
• Live data table with all 10 defense stocks showing price, market cap, P/E, dividend yield, beta, RSI, 52-week range, YTD change, and composite score
• Automatic scoring based on the five-factor model described above
• Conditional formatting to highlight top-scoring stocks

Every data point in the MarketXLS version updates in real time when your add-in is active. The sample version shows static data as of March 26, 2026, with formula references so you can see exactly which MarketXLS function produces each value.

Sheet 3: Geopolitical Scenario Analysis

Seven distinct geopolitical scenarios with impact ratings for each stock. This sheet helps you stress-test your portfolio under different assumptions about how global events might unfold. The scenarios range from Iran escalation to U.S. defense budget increases, covering the most likely near-term developments.

Sheet 4: Defense Strategy Builder

A tactical sheet that provides:

• Support and resistance levels calculated from 52-week high/low data
• Entry zones for each stock based on technical levels
• Stop-loss levels for risk management
• Target prices for profit-taking
• Position sizing recommendations as a percentage of portfolio
• Sector allocation suggestions broken down by large-cap defense, mid-cap defense, growth/speculative, aerospace/commercial, and cash reserves

Sheet 5: Portfolio Allocation

This sheet takes your portfolio size input and calculates:

• Dollar allocation per stock based on suggested weights
• Number of shares you can purchase at current prices
• Annual dividend per share for income projection
• Total annual dividend income from your defense portfolio
• Yield on cost for each position

In the MarketXLS formula version, the share calculations use =Last("TICKER") for current prices and =DividendPerShare("TICKER") for accurate dividend projections.

Sheet 6: Correlation Matrix

Understanding how defense stocks move relative to each other — and to broader market benchmarks — is critical for portfolio construction. This sheet shows the correlation between all 10 defense stocks plus three benchmarks:

• SPY (S&P 500) — broad market comparison
• XLE (Energy Select Sector) — oil price sensitivity proxy
• GLD (Gold) — safe-haven correlation

Defense stocks tend to exhibit high intra-sector correlation (0.55-0.85 range) but lower correlation to energy and negative-to-low correlation with gold, providing useful diversification insights.

Download the Defense Stocks Screener Templates

Two versions of the template are available:

Static Sample Version — Contains all six sheets with sample data as of March 26, 2026. Requires no add-ins; works in any version of Excel. Formula references are shown so you can see which MarketXLS functions produce each value.

MarketXLS Formula Version — Contains live MarketXLS formulas that update automatically. Requires the MarketXLS Excel add-in to be installed and active. All data refreshes in real time.

Both files include all six sheets with professional formatting, frozen panes, proper number formatting, and color-coded headers. Input cells are highlighted in yellow for easy identification.

Customizing the Screener

The template is designed to be extensible. Here are several ways you can customize it for your specific needs:

Adding More Stocks

To add additional defense stocks (such as AXON, PLTR, or defense-focused ETFs like ITA and PPA), simply add new rows to the dashboard and replicate the MarketXLS formulas with the new ticker symbol. The scoring formula will automatically calculate a composite score for any stock.

Adjusting Score Weights

If you prioritize income over growth, increase the Income component weight from 20% to 30% and reduce Momentum accordingly. The scoring formulas in the template can be easily modified to reflect your investment philosophy.

Adding ETF Comparison

Many investors prefer ETF exposure to individual stock picking. You can add rows for defense ETFs like ITA (iShares U.S. Aerospace & Defense), PPA (Invesco Aerospace & Defense), and XAR (SPDR S&P Aerospace & Defense) using the same MarketXLS functions.

Incorporating Earnings Dates

MarketXLS provides earnings date functions that can be added to track when each defense contractor reports quarterly results — a critical catalyst for price movement. Visit MarketXLS for the complete function reference.

Frequently Asked Questions

What are the best defense stocks to invest in?

The "best" defense stocks depend on your investment objectives, risk tolerance, and time horizon. Based on the composite scoring model in this screener, LMT (Lockheed Martin), NOC (Northrop Grumman), and HII (Huntington Ingalls) currently score highest due to their combination of reasonable valuations, positive momentum, dividend income, and quality metrics. However, this analysis is for educational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting a financial advisor.

How do I screen defense stocks in Excel?

To screen defense stocks in Excel, you need a data source and a scoring methodology. The MarketXLS Excel add-in provides functions like =Last("TICKER"), =PERatio("TICKER"), and =RSI("TICKER") that pull live market data directly into your spreadsheet. Combined with standard Excel formulas for scoring and ranking, you can build a comprehensive screener that updates in real time. The templates provided in this article give you a ready-made framework.

Do defense stocks outperform during wars and geopolitical conflicts?

Historical analysis suggests that defense stocks often outperform the broader market during the initial phases of geopolitical escalation. The uncertainty premium drives investors toward sectors with predictable government-funded revenue streams. However, the relationship is complex — prolonged conflicts can lead to budget pressures, while diplomatic resolutions can cause rapid mean reversion in defense stock valuations. The geopolitical scenario analysis sheet in the template helps you model these different outcomes.

What is the best defense ETF?

Several ETFs provide exposure to the defense sector. The iShares U.S. Aerospace & Defense ETF (ITA) is one of the largest and most liquid, tracking an index of U.S. aerospace and defense companies. The SPDR S&P Aerospace & Defense ETF (XAR) offers equal-weighted exposure, reducing concentration risk. The Invesco Aerospace & Defense ETF (PPA) provides another alternative. Each has different weighting methodologies and expense ratios. The correlation matrix in the template can help you understand how individual defense stocks relate to these broader ETF benchmarks.

How does geopolitical risk affect defense stocks?

Geopolitical risk affects defense stocks through several channels: increased government defense spending (direct revenue impact), heightened investor demand for "safe" government-backed revenue streams (valuation multiple expansion), accelerated procurement timelines for weapons systems and military equipment, and increased international demand from allies seeking to bolster their own defense capabilities. The scenario analysis framework in the screener template models these impacts across seven distinct geopolitical scenarios.

Can I track defense stocks in real-time in Excel?

Yes. With the MarketXLS add-in installed in Excel, functions like =Last("LMT") and =Volume("LMT") provide real-time data that updates automatically. This means your defense stocks screener, portfolio allocation calculations, and scoring model all reflect current market conditions without manual data entry. To see how MarketXLS works with your workflow, you can book a demo.

The Bottom Line

Building a defense stocks screener in Excel provides a structured, analytical framework for evaluating one of the market's most important sectors during periods of geopolitical uncertainty. The five-factor scoring model — combining value, momentum, income, quality, and risk metrics — offers a comprehensive view that goes beyond simply looking at price charts or reading headlines.

The current environment, with oil above $93, VIX above 27, and multiple geopolitical flashpoints active simultaneously, makes defense sector analysis particularly timely. Whether the Iran situation escalates, NATO allies continue their rearmament programs, or tech war tensions reshape defense procurement priorities, having a systematic screener in place allows you to respond quickly and rationally to changing conditions.

The MarketXLS-powered template eliminates the most time-consuming part of fundamental analysis — data collection — by pulling live market data directly into your scoring framework. Combined with the geopolitical scenario analysis, strategy builder, portfolio allocation calculator, and correlation matrix, the six-sheet workbook provides everything an analyst or investor needs to make informed, data-driven assessments of the defense sector.

Download the templates, customize the scoring weights to match your investment philosophy, and use the scenario analysis to stress-test your assumptions. For more on how MarketXLS can enhance your Excel-based investment research, visit marketxls.com or book a personalized demo to see the platform in action.

All data, scores, and analysis presented in this article are for educational and illustrative purposes only. They do not constitute financial advice or recommendations to buy, sell, or hold any security. Past performance does not guarantee future results. Always conduct your own due diligence and consult with a qualified financial advisor before making investment decisions.