With the world markets in a seeming free fall with no bottom in sight it can become easy to get distracted by all the financial news headlines touting bear markets, deflation and recessions. These headlines can easily instill fear in anyone who is currently in the stock market or thinking about getting into the market. One mustn’t forget that it’s during these dramatic dips in stock prices that better values and yields rear their heads.

As you know, I like to look at various dividend paying stocks based on specific sectors. I always find it an easy way to identify major players in a business that one could readily understand. Reading the various dividend blogs we constantly discuss the “major” sectors that seem to be found in every long term dividend growth portfolio. You know the names I’m talking about. Energy, consumer staples, industrial, finance and more. However, the defense sector doesn’t seem to garner as much attention as I think it should. Some great names in this sector are starting to sport some pretty attractive numbers and one might say that it is a sector that can withstand a slowdown in economic activity and even a recession with the world being as insecure as it is. Some have said that the powers that be, LMT, BA, RTN, GD, NOC and the like are poised for some serious growth in 2016 despite fiscal headwinds with the world in an increasing state of war. Between activities in the Middle East with Russia ramping up military efforts, increased NATO fighters, not to mention China Sea escapades, North Korea, African and European terror activities, it can be said that defense contractors are poised to win from these tragedies. A sad but realistic view of the world in which we live. With that being said, let’s take an overview of some of the top names in the defense sector.

First up, Lockheed Martin Corporation (LMT). A company with roots that go back well over 100 years developing and manufacturing aerospace, security and combat systems. LMT currently yields a decent 3.07% with a moderate payout ratio of 58.1%. It has a track record of dividend raises going back thirteen years with an impressive ten year annualized dividend growth rate of 19.34%. That growth rate will definitely get you a nice yield on cost in several years time. From a valuation perspective LMT has a current PE of 19.1 which is higher than its five year average PE of 13.9. Forward PE looks a lot more attractive at 15.5. Even at these depressed prices LMT is expected to continue paying its dividend in 2016 with room for future growth.