3 Defense Stocks Retail Investors Are Watching After Iran Sanctions

With fresh U.S. sanctions on Iran linked banks and renewed strikes around the Strait of Hormuz, global defense and security stocks are back in the spotlight. These moves are reshaping expectations for financial flows, energy supply risk, and government spending priorities, which investors often watch closely. This article walks through three stocks from our Global Defense and Security screener that appear particularly exposed to this news driven backdrop.

The three stocks below are just a starting sample from this theme. The full screen surfaced 51 more global defense and security companies with equally compelling narratives that are not covered here. To identify and analyze potential high conviction ideas for your own watchlist, head straight to the Global Defense and Security Stocks screener.

Ducommun (DCO)

Ducommun is a long established US aerospace and defense supplier that sits squarely within the Global Defense and Security theme, providing components and assemblies that support aircraft, missile, radar and avionics programs for U.S. and allied customers. It generates about US$492.9 million from its Electronic Systems segment, which covers items like radar enclosures, avionics racks and microwave components, and roughly US$372.1 million from Structural Systems, which produces complex aerostructures and ammunition handling systems. The stock has a market cap of about US$2.7b, so you are looking at a mid sized player with meaningful exposure to defense supply chains rather than an early stage contractor.

Investors watching the recent Iran related sanctions and renewed strikes around the Strait of Hormuz may find Ducommun interesting because it ties that geopolitical backdrop to real content on missiles, radar and aircraft. The company is leaning into higher margin engineered products and automation, while a large missile oriented backlog and focus on domestic sourcing speak to both earnings quality and supply security. At the same time, Ducommun is still working through a shift from losses to sustained profitability and carries higher reliance on external funding, so execution on cost savings, facility consolidation and program ramp ups will matter. If you want exposure to the defense theme with a value tilt and operational story still in progress, Ducommun is worth a closer look.

Ducommun’s shift toward higher margin engineered products and missile related backlog raises important questions about the future direction of its earnings quality. Get the full picture in the analysis report for Ducommun

Cadre Holdings (CDRE)

Cadre Holdings is a US based safety and protective equipment company that links directly into the Global Defense and Security theme through its body armor, bomb suits, duty gear and nuclear related safety products used by law enforcement, military and first responders worldwide. Most of its roughly US$621.5 million in revenue comes from its Product segment, with about US$98.9 million from Distribution and a smaller reconciling adjustment. With a market cap of about US$1.3b, Cadre provides exposure to mission critical gear rather than big ticket weapons systems.

Cadre Holdings offers a different angle on defense exposure because it focuses on keeping people alive in hazardous situations, from body armor and bomb suits to blast monitoring and nuclear safety gear. Recent contract wins, raised guidance through mid 2026 and growing international reach indicate that the underlying demand story is active, particularly as governments and agencies refresh protective equipment and emergency response capabilities. Investors do need to watch contract timing, high debt levels and integration risk from acquisitions. Those who want to understand how recurring safety equipment needs might relate to earnings resilience and potential upside in a higher security environment may find Cadre worth a deeper look.

Cadre Holdings may have contract momentum and an expanding international reach, but the real story could be how recurring safety gear demand interacts with its balance sheet and acquisition pace. Get the full analysis report for Cadre Holdings

Thales (ENXTPA:HO)

Thales is one of Europe’s biggest defense and security contractors, supplying governments with air defense systems, radar, naval combat systems, secure communications, and cybersecurity, which fits tightly with the Global Defense and Security Stocks theme. The group earns about €13.3b from Defence, €6.1b from Aerospace, and €3.9b from Cyber & Digital, with a smaller offset in Other, and has a market cap of roughly €50.3b, putting it firmly in large cap territory.

Thales gives you broad exposure to defense hardware, secure communications, and cyber, all in one €50b plus group that many governments already rely on for radar, surveillance, and advanced avionics. The current Iran sanctions backdrop keeps attention on exactly the kind of intelligence, airspace protection, and cyber resilience systems that Thales sells. At the same time, a recent €613.7m loss item and a charge linked to the terminated German F126 frigate subcontract show how contract and execution risk can hit earnings, especially in complex defense programs. If you are looking for a large European defense stock with both cybersecurity potential and some moving parts around debt funded deals and digital integration, Thales is worth keeping on the radar.

Thales combines air defense, secure communications and cyber in one €50.3b group, yet that breadth can mask where the real earnings risk sits. Get the 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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