RTX Beats Lockheed Martin on Risk -- Here's Why It's the Better Buy Long-Term

When comparing Lockheed Martin and RTX, the commercial aerospace sector of RTX tends to carry higher valuation premiums compared to defense companies. Despite this, RTX's defense business, Raytheon, is considered to have lower risk than Lockheed Martin's. This is because RTX's defense sales make up a smaller portion of its total revenue, and the company has demonstrated a willingness to cancel unfavorable fixed-price contracts.

Costs overruns and delays associated with complex projects like the F-35 and KC-46 are affecting both Lockheed Martin and companies like Boeing, but RTX seems to be better positioned. With a higher valuation multiple than Lockheed Martin, RTX could be the better long-term investment choice.