Defense stocks with dividends have been surging in popularity of late. There was a massive shift in the geopolitical scene once Russia invaded Ukraine in February this year.

Assets invested in defense stocks grew at an incredible pace. For instance, in June, assets and outstanding shares increased by more than 50% in the Invesco Aerospace and Defense ETF.

Despite the markets being ravaged by inflation and high-interest rates, defense stocks held up remarkably well. Add to that the strong dividend yields, and you have an excellent investment option for investors.

Naturally, the Russia/Ukraine conflict is fueling growth for the defense sector, as nations are looking to beef up their defensive capabilities. Billions of dollars are being invested by different countries, which makes defense stocks tremendous bets at this stage.

Lockheed Martin (LMT)

Dividend Yield: 2.54%

Lockheed Martin (NYSE:LMT) is arguably the pick of the defense stocks with dividends at this time.

Lockheed’s incredible brand equity has helped generate consistent cash flows, and the company rewards its shareholders consistently. In the past 10 years, Lockheed has grown operational earnings and cash flows by low double-digit margins. Moreover, it has grown its dividend payouts for 20 consecutive years.

Its second-quarter results came in weaker-than-expected amidst inflation and supply chain troubles. The U.S. government’s F-35 aircraft contract is being modified to address the current macro-economic issues.

Nevertheless, cash generation remains remarkable as it continues to ink new multi-million dollar contracts. Hence, LMT remains in a strong position to wrap up its year with considerable aplomb.

Booz Allen Hamilton (BAH)

Dividend Yield: 1.75%

Booz Allen Hamilton (NYSE:BAH) is the top spy company in the world, delivering critical capabilities and services to its broad customer base.

It has an incredible history of organic sales, earnings per share growth and a massive order backlog. The company also has a tremendous track record of growing shareholder returns with a more-than 20% dividend expansion in the past five years.

BAH operates at an impressive scale and is poised for colossal gains ahead. Though it caters to private clients, nearly 70% of its business is from the public sector. Consequently, its order backlog is typically well-filled, allowing it to generate consistent cash flows.

In its latest quarter, BAH posted $2.25 billion in sales, beating estimates by $60 million and offering 18.4% growth from the prior-year period. It remains in an excellent position to push on for bigger gains ahead.

Raytheon Technologies (RTX)

Dividend Yield: 2.32%

Raytheon Technologies (NYSE:RTX) operates a diversified defense business that expanded its tentacles in multiple profitable verticals.

Its divisions include intelligence, space, missiles, defense, and robust commercial-aviation business. RTX has established itself as one of the leading aircraft engine suppliers. Perhaps one of Raytheon’s competitive advantages is that if its defense contracts business is struggling, it can effectively fall back on its other segments to offset any losses.

Its commercial-aviation side has recently been the star thanks to healthy demand for airplane and engine parts. The segment also could benefit from the single-digit growth expected in the aviation sector over the next few decades.

Raytheon will also likely see demand for its missiles and missile-defense systems increase as the U.S. and its allies look to restock due to the Ukraine war.

Growth rates of late have been relatively solid across all core divisions, and with it just four years away from dividend king status, RTX is an attractive wager at this time.

BWX Technologies (BWXT)

Dividend Yield: 1.63%

BWX Technologies (NYSE:BWXT) is a top manufacturer and supplier of nuclear technology and components for carriers and submarines.

It’s been a key beneficiary of secular growth opportunities in the commercial and defense sectors and remains the primary supplier of nuclear reactors to the U.S. Navy.

Its recent deal with the U.S. Department of Defense to develop the first nuclear reactor in the U.S. is a testament to its strong positioning in the defense sector. BWX is also looking to explore opportunities in the emerging field of nuclear medicine, which could potentially grow to $21 billion by 2030.

In terms of its fundamentals, revenue and EBITDA growth have grown by roughly 6.7% and 10.3%, respectively, over the past five years. Operating cash flows have risen 24.7% on a year-over-year basis during the same period. Additionally, BWXT stock trades at just 2.18 times forward sales, further adding to its attractiveness.

L3Harris Technologies (LHX)

Dividend Yield: 1.87%

L3Harris Technologies (NYSE:LHX) designs and develops communications equipment for the military aerospace sector.

The company operates a diversified portfolio in space, operating in the integrated mission, space and airborne and communications systems. Its business has slowed down of late due to supply chain issues, but its long-term case remains intact. Also, L3Harris’ enviable dividend portfolio and relatively low valuation make it one of the sector’s best income and value plays.

Moreover, it plans to reduce its leverage this year, reducing net debt to $5.73 billion in 2022. Revenues are expected to fall in the $17.3 billion to $17.7 billion range, compared to the consensus of $17.5 billion.

L3Harris is one of the best ways to gain defense exposure without taking up too much risk.

Northrop Grumman (NOC)

Dividend Yield: 1.41%

Northrop Grumman (NYSE:NOC) is another defense contractor exposed to some of the fastest-growing defense-related segments.

Its segments include advanced aeronautics, space, mission systems, and others. Moreover, it remains low volatility, dividend growth investment boasting 16 years of consecutive growth in dividend payouts.

Perhaps the biggest competitive advantage for Northrop is that it has been part of virtually every major defense project. Moreover, its incredible space exposure gives it a leg up over its competition.

The segment had a stunning $37.1 billion order backlog, representing nearly 50% of the current backlog. The sector continues to grow at a healthy pace while other segments have slowed down of late. Free cash flows stand at a remarkable $2.15 billion, which puts it in an amazing financial position.

General Dynamics (GD)

Dividend Yield: 2.08%

General Dynamics (NYSE:GD) is known for developing the U.S. army’s F-16 Fighting Falcon and mortar bodies.

It operates a versatile business that includes marine systems, aerospace, and other related segments. Moreover, it has an impeccable margin profile, generating double-digit gross and EBITDA margins over the past five years. Additionally, it boasts a spectacular dividend profile with close to a 41.46% payout ratio.

Its combat systems division its most profitable business unit. In June, the U.S. Army awarded the firm a whopping $1.1 billion contract to build a new light tank. The Army says it will need 504 light tanks, spending nearly $17 billion on the program through a 30-year lifespan. This translates to a hefty $570 million in sales each year.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.