Defense sector investors are sizing up two of the industry’s biggest names as valuations come into sharper focus in mid-2026.
General Dynamics (GD) and RTX (RTX) both operate in the aerospace and defense space, making them natural comparison points for value-oriented portfolios.
Both stocks currently carry a Zacks Rank of #2 (Buy), reflecting positive revisions to their respective earnings estimates in recent months.
The Zacks Rank system favors companies with improving earnings outlooks, meaning both GD and RTX have demonstrated strengthening fundamental momentum heading into the second half of the year.
However, for value investors, earnings trajectory is only part of the equation, and traditional valuation metrics tell a more nuanced story between the two companies.
GD currently holds a forward price-to-earnings ratio of 22.72, a notably more attractive figure compared to RTX’s forward P/E of 29.13.
On a price-to-earnings-growth basis, GD also comes in lower with a PEG ratio of 2.34, versus RTX’s PEG ratio of 2.85, suggesting GD offers more value relative to its expected growth rate.
The PEG ratio builds on the traditional P/E measure by incorporating a company’s anticipated earnings growth, giving investors a fuller picture of whether a stock is fairly priced.
GD’s price-to-book ratio stands at 3.91, which compares favorably against RTX’s P/B ratio of 3.99, though the two companies are relatively close on this particular metric.
These combined valuation data points feed directly into the Zacks Style Scores system, which evaluates stocks across several fundamental categories including P/E, P/S, earnings yield, and cash flow per share.
When all valuation metrics are weighed together, GD earns a Value grade of B under the Zacks Style Scores framework, while RTX receives a Value grade of C.
That single-grade difference may appear modest, but it reflects a consistent pattern across multiple valuation measures rather than one isolated data point.
Both companies remain well-regarded within the defense sector, with solid earnings outlooks that justify their respective Buy rankings heading into the back half of 2026.
For investors prioritizing value above other factors, however, the data as it currently stands points to General Dynamics (GD) as the more compelling opportunity over RTX (RTX).
