BWX Technologies

BWXT is the sole licensed manufacturer of nuclear reactors and fuel for United States Navy submarines and aircraft carriers. No competitor is allowed to bid against them. That locked position helped push their order backlog to 8.4 billion dollars at the end of June, up about 40 percent from a year earlier, which is more than two years of revenue already signed and booked.

The commercial half of the business is growing fast as nuclear power comes back into favor worldwide. Commercial revenue jumped 72 percent to 302 million dollars in the second quarter of 2026. Management has now raised its full year profit forecast four quarters in a row, and expects to generate between 345 and 360 million dollars of free cash flow this year.

The stock trades near 36 times this year's expected earnings, while most defense peers trade closer to 16 to 22 times. At that price you are paying today for years of growth that has not happened yet. The stock has already fallen roughly 30 percent from its April high, which shows how quickly that premium can disappear.

Sales are growing much faster than profits. In the second quarter of 2026 revenue rose 18 percent, but adjusted operating earnings rose only 7 percent, so margins actually shrank from 19.1 percent to 17.2 percent. The company also carries about 1.4 billion dollars in net debt while spending heavily on new factories, which leaves less room for error.