The greatest European defense groups they are ready to return to the shareholders approximately 5 billion dollars in dividends this year, after the surge in global military spending following the war in Ukraine.
According to an analysis of the last decade conducted by Vertical Research Partners for Financial Times, most of this year's exceptional returns for eight of Europe's largest companies of the defense sector is realized in higher dividends.
The research, which focuses on major defence industry players (but excludes Airbus, given its vast commercial activities), shows that payments are set to reach the highest level in the last 10 years.
Not only that. Even with scented coupons, research shows that even the investments in the European defence sector have increased significantly sinceinvasion of Ukraine by Russia, which occurred about four years ago, as the companies have expanded production.
The search for Vertical shows that the'average investment of the basket of European companies analyzed (measured as capital expenditure plus R&D expenditure as a percentage of revenues) should go up to 7,9% in 2025. In 2021, the year before the conflict in Ukraine began, this figure was 6,4%.
While investors are closely following the new timid progress in the negotiations to reach peace in Ukraine, on the stock market today defense titles they are decreasing. In Milan Leonardo lost 4,11% to 47,42 euros, but in the last year it has brought home an increase of 82%. In Frankfurt the giant Rhein Metall The share price is 1.496,00 euros, down 3,11%, while it has gained almost 150% over the year. In Paris Thales It is at 224,50 euros, down 1,79% today, while it has gained 63% over the year.
The defense sector in the US is further behind
In reverse, i returns for shareholders of the six largest defense companies United States (Lockheed Martin, General Dynamics, Northrop Grumman, RTX Corporation, L3Harris Technologies and Huntington Ingalls) they have decreased, after reaching a 10-year peak in 2023. At the same time, the investments – capital expenditures and self-funded research and development, calculated as a percentage of revenue – decreased slightly. Boeing is excluded, given its significant civil aerospace operations.
The industry has come under fire, particularly in the United States, over questions about whether it is investing the proceeds of the boom to ramp up production of new weapons and not simply spending those gains on stock buybacks. Donald Trump He urged defense leaders to invest in manufacturing, boosting profits for shareholders. This week will discuss these topics with companies in Florida.
His comments follow those of the US Treasury Secretary Scott Bessen, who in October had stated that the defense sector companies of the country were "sadly behind in terms of deliveries, so we may have to, as their largest customer… push them to do a little more research and a little less share buybacks.” Rob Stallard, an analyst at Vertical Research, points out that the accusation that the US defense industry has underinvested or is “profiteering” “is not supported by the facts.” “Over the last two years, share buybacks and dividends as a percentage of market capitalization [of US companies] have almost halved.”
