RTX Corporation Stock: $93B Defense Backlog Fuels Growth

Key Points

• A growing defense backlog, driven by sustained global demand for its key programs, provides the company with exceptional multi-year revenue visibility.
• The commercial aerospace segments provide a powerful, independent growth engine fueled by a resilient recovery in global air travel and maintenance services.
• A long-standing history of dividend growth and significant capital return programs underscores management's confidence and commitment to shareholder value.

The global market is currently defined by two powerful and distinct currents: rising geopolitical instability and a resilient demand for commercial air travel.

Few companies are built to navigate both of these worlds, but RTX Corporation NYSE: RTX is uniquely structured to do so.

The aerospace and defense giant operates under a dual mandate, serving governments that are building their national security while also supporting commercial airlines that are expanding their fleets. 

The $93 Billion Backlog of Stability

The foundation of RTX's investment appeal rests within its Raytheon segment. In a period of increasing global defense spending, this business provides a predictable and growing stream of revenue that is less dependent on general economic cycles. The most telling metric of this stability is the segment’s substantial defense backlog, which stood at a record $93 billion at the end of 2024.

This backlog represents tangible future sales from high-demand products, creating a multi-year tailwind for the stock. Key programs driving this growth include:

• Air and Missile Defense: The combat-proven Patriot system remains a top priority for nations seeking to modernize their air and missile defenses. This is shown by a recent $2.4 billion contract to provide systems to Germany, showcasing continued strong demand from key NATO allies.
• Advanced Munitions: Demand for precision weapons is high. Raytheon is a leader in this area with its AMRAAM air-to-air missiles and the Evolved SeaSparrow Missile (ESSM) program, which recently secured a $299.7 million contract modification.
• Next-Generation Systems: Looking to the future, the company is ramping up production of its Lower Tier Air and Missile Defense Sensor (LTAMDS), the Army's designated replacement for the Patriot radar. A recent $1.9 billion award for the U.S. and Poland highlights the critical transition to more advanced systems designed to counter emerging threats.

For investors, this backlog is a significant de-risking factor. It provides exceptional visibility into future earnings and cash flow, insulating the company from short-term market volatility and allowing management to execute its long-term capital plans with confidence.

A Growth Engine With a Clear Flight Path

While Raytheon provides the stable foundation, RTX’s commercial aerospace businesses (Pratt & Whitney and Collins Aerospace) offer a powerful growth dynamic. The global recovery in air travel has fueled a surge in the highly profitable business of aircraft maintenance, repair, and overhaul (MRO). This was evident in the first quarter of 2025, which saw a 21% year-over-year increase in commercial aftermarket sales.

A key focus for investors has been the Pratt & Whitney Geared Turbofan (GTF) engine issue, which required accelerated inspections. RTX now has a well-defined plan to manage the situation, and the market largely understands the financial impact.

The company is making clear progress, increasing its MRO output by approximately 30% in 2024.

This extensive inspection program solidifies a predictable, high-margin services business that will last years.

Confidence in the GTF platform's long-term value remains strong. The engine’s superior fuel efficiency continues attracting customers, demonstrated by over 950 new orders and commitments secured in 2024.

With a commercial backlog of $125 billion, this side of the business is positioned to recover and drive significant future growth.

The Price of Quality

Following its strong performance, RTX's valuation reflects its positive outlook. With a price-to-earnings ratio (P/E) of approximately 24, the stock is trading at a premium compared to its recent past. For many investors, this reflects the price of quality and stability in the current market.

Operationally, the primary internal factor to monitor is the continued execution of the multi-year GTF fleet management plan. While the company has expressed high confidence, the scale of the undertaking requires sustained focus.

Externally, as a global leader, RTX is exposed to macroeconomic risks such as potential international tariffs, a standard consideration for any multinational industrial company.

A Unique Blend of Stability and Shareholder Value

RTX's investment appeal is built on a foundation of strategic balance. The Raytheon segment offers stability driven by the enduring demand for national security, while the commercial aerospace segments provide growth from the long-term trend of global travel. This structure enables the company to operate effectively across a wide range of economic scenarios.

This operational strength translates directly into financial fortitude and the ability to deliver tangible value back to its owners. The company's recent 7.9% dividend increase directly signals management's confidence in future cash flow. That action is reinforced by an 88-year history of paying dividends, cementing its status as a reliable blue-chip investment.

For those seeking a foundational holding in the critical aerospace and defense sector, RTX’s balanced business model and proven commitment to shareholders present a compelling case for long-term value creation.