Why the World's "Second-Oldest Profession" Is Now a $1.7 Trillion Juggernaut

defense stocks

With the world's oldest profession already staked out, there are many competitors for second oldest.

Leading claimants include spies and politicians, but that can't be right. In order to have spies and politicians, there has to be an army to spy on.

Unfortunately, the military and the job they do - namely, fighting wars - has been with us pretty much since the dawn of time. The first recorded battle was the Battle of Megiddo 15 years before the birth of Christ, but anthropologists have gathered lots of anecdotal evidence of tribal battle centuries before someone thought to write down the details.

defense stocksLet me be clear: I think war is the single dumbest invention and habit ever developed by humanity. Killing each other over land, religious principles, commodities, or any of the other epically stupid reasons we have invented for war is asinine.

Unfortunately, as long as there are nations, states, religions, political parties, tribes, or any other collective group of humans, there will always be one group that wants to force their will upon another or simply take what they have.

It is a truly horrible idea, but at times it is necessary to fight back to preserve your freedom or way of life.

What can we do about it? Not one damn thing. We can sing songs, put flowers in our hair, hold rallies, wave signs, make movies, form drum circles, or engage in Gregorian chanting outside the homes of political leaders, and it will not make a bit of difference. There will always be bad actors on the world stage willing to slaughter people to attain their desires, so war is pretty much a permanent part of the human condition.

I wish I were wrong, but I am not.

Powerful Investment Income Stream: The Treasury is sitting on an $11.1 billion money pool. By adding your name to a special distribution list, you could begin collecting $1,795 or more every month. Get the details...

That cold reality is why War, Terrorism, and Ugliness is one of Money Morning Chief Investment Strategist Keith Fitz-Gerald's six Unstoppable Trends. As much as we wish war would go away, it won't.

Billions of dollars will be spent to keep the U.S. military strong enough to discourage the bad actors from trying to impose their will on their neighbors or expand their territory by force of arms. The War on Terror is not going away anytime soon, and a strong military is a vital part of preventing future attacks. Global military spending reached $1.7 trillion in 2017 alone.

And while we may not like war, we might as well profit from the buildup.

While there's no shortage of military and defense stocks you can invest in, only a handful are worth your money.

That's why I've uncovered two stocks plugged into this trillion-dollar behemoth of an industry with the potential to return unreasonably high gains...

These 2 Defense Stocks Need to Be On Your Radar

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

One of the more direct beneficiaries of all this military spending is Vectrus Inc. (NYSE: VEC).

The Colorado Springs--based company provides facilities and logistics services to the U.S. military. It does everything from airfield and ammunition management to equipment maintenance and repair. It also offers IT services, including important cybersecurity and data-management systems. It knows its market pretty well, since more than 35% of its 6,700 employees are former military.

The business is growing nicely right now, too.

Revenue in the first quarter was up more than 10%, and the backlog of contracts to be filled rose by more than 13% to $3.3 billion. Vectrus won contracts to provide base maintenance support services at Sheppard Air Force Base in Texas and another one to provide maintenance services at U.S. Army Garrison in Stuttgart, Germany.

As of the end of the first quarter, Vectrus has $1.4 billion of proposals submitted and pending potential award, and management has identified an additional $8 billion in potential projects they will be trying to win.

It's simple: The military needs external support to function, and this company can help it run its bases and move supplies from where they are to where they need to be.

Vectrus can help the military use and protect technology more efficiently. It will be well paid for doing so, and that's going to drive consistent profit growth, which over time will push the stock higher.

Plus, it sports a perfect Money Morning Stock VQScore™, which makes it one of the best buys on the market today.

I would buy a little at current levels and a lot more should the shares decline in a broad market sell-off in the second half of the year.

Ducommun Inc. (NYSE: DCO) is another company that does a lot of business with the U.S. military, and our VQScore system considers it a buying opportunity right now.

Click here to see all of our top-rated stocks, and you'll automatically get free updates on our top stocks, based on our proprietary rating system, the Money Morning Stock VQScore™.

Ducommun makes electronic components for military aircraft and missile systems. It also supplies structural parts for both rotary and fixed-wing aircraft used by the military.

While Ducommun also works with commercial aviation and industrial companies like Boeing Co. (NYSE: BA) and Gulfstream, 57% of its revenue and 73% of its current business backlog comes from the U.S. military and space programs.

Over the past few years, management has exited weak business deals, reinvesting the profits in its faster-growing businesses.

According to CEO Stephen Oswald, it's already working. He said on the first-quarter conference call, "I'm proud of the steady improvement here at Ducommun. I think it should be noted by investors that we reduced cost by $14 million this year. We're expanding margins, driving top line and bottom line improvements, winning new business. We're going through acquisitions and reaching record backlog levels."

Management has skin in the game here too. They collectively won almost 1 million shares of stock in the company. All principal officers and directors own shares in the company, so the better they execute, the richer they become. And the richer we'll get alongside them.

This is a stock that I think you can own for a very long time and see profits pile up to unreasonably exciting levels.

Public Law 92-313 Creates $11.1 Billion Cash Bonanza

Thanks to an obscure law, over 100 government agencies are required to pay rent, including the DOJ, FBI, and NASA.

This money is being funneled into the Treasury. And it's helped create an enormous $11.1 billion pool of money.

If you add your name to a special distribution list, you could begin collecting $1,795 or more every month from this powerful investment income stream.

Click here to learn more...

Follow Money Morning on Facebook, Twitter, and LinkedIn.

Recommended