2 Defense Shares Worth Purchasing This March

Global Military Budgets Are Climbing

Worldwide defense expenditures are increasing rapidly. The United States, for instance, has allocated $838.5 billion for its 2026 military budget, and former President Trump has suggested raising that figure to $1.5 trillion in 2027—nearly twice the previous amount. This trend is not unique to the U.S.

Germany, too, has significantly boosted its defense spending in recent years, now ranking as the fourth-largest military spender globally, following the U.S., China, and Russia. Over the next five years, Chancellor Friedrich Merz aims to double Germany’s military budget, striving to meet NATO’s target of 3.5% of GDP.

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As new conflicts emerge and existing tensions persist, defense industry stocks are becoming increasingly attractive investments. The two companies discussed here stand out as strong additions to any portfolio.

Image source: Getty Images.

Rheinmetall: Germany’s Defense Powerhouse

Headquartered in Dusseldorf, Rheinmetall (OTC: RNMBY) has evolved far beyond its origins as an artillery producer. Today, the company manufactures a wide range of military assets, including vehicles, tanks, naval ships, and satellites.

Rheinmetall supplies military hardware to numerous European nations such as Italy, Ukraine, the Netherlands, the United Kingdom, and Germany. Its Lynx IFV is being adopted not only by the U.S. military but also by several European countries, Indonesia, and Brazil.

Additionally, the company is a leader in advanced air defense systems, which are increasingly crucial in the era of drone warfare. Insights gained from deploying the Leopard 2 tank in Ukraine are now being applied to Rheinmetall’s next-generation Panther Kf51 tank.

The Panther Kf51 features an autonomous rear-mounted machine gun for anti-drone defense and can be equipped with up to four HERO 120 loitering munitions for additional drone capabilities.

Germany’s increased defense budget, alongside broader European efforts to strengthen military forces, has significantly benefited Rheinmetall’s business.

According to its latest financial report (March 11, 2026), Rheinmetall’s 2025 sales reached 9.9 billion euros—a 29% increase from 2024. Operating profit climbed 33% to 1.8 billion euros, and the company’s order backlog expanded by 36% due to new contracts from Germany and other countries. Net profit margin also improved, rising to 11.8% in 2025 from 9.19% the previous year.

Looking Ahead for Rheinmetall

With Germany’s defense spending expected to keep rising throughout the decade, Rheinmetall appears well-positioned for continued growth in the coming years.

Lockheed Martin: Dominating the Skies

Lockheed Martin (NYSE: LMT) serves as the American counterpart to Rheinmetall, producing a comprehensive array of military technology for air, land, sea, space, and cyber operations.

Unlike Rheinmetall’s focus on ground vehicles, Lockheed Martin specializes in aerospace. Its most iconic products include the Black Hawk helicopter, F-16 Falcon, and F-35 Lightning II fighter jet. The company also previously manufactured the F-22 Raptor, which remains in service, and continues to develop radar systems, naval weapons, and ammunition.

With the U.S. planning further increases to its already substantial military budget, Lockheed Martin ended 2025 on a strong note.

Annual sales grew by 6% over 2024, reaching $30.25 billion. While operating profit declined 17% for the year, the fourth quarter saw a dramatic rebound, with operating profit up 80% compared to Q4 2024. Lockheed Martin maintains a net profit margin of 6.69% and anticipates 5% sales growth for 2026.

The company is poised for steady expansion, especially if the proposed $1.5 trillion U.S. military budget is approved.

Is Now the Time to Invest in Rheinmetall?

Before purchasing shares of Rheinmetall Ag, consider this:

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James Hires does not hold positions in any of the mentioned stocks. The Motley Fool has recommended both Lockheed Martin and Rheinmetall. For more details, see our disclosure policy.

2 Defense Stocks to Buy in March was originally published by The Motley Fool.