This week’s Stock of the Week stands to gain from an increase in military spending at home and abroad.

In Defense

BAE Systems plc (BAESY), based west of London, is the main supplier of defense, aerospace and security products and systems to Britain’s Ministry of Defence.

It is also one of the top 10 suppliers to the US Department of Defense and one of the world’s largest defense contractors overall. BAE produces combat vehicles, weapons and munitions as well as electronic-warfare systems, digital engine and flight controls, military communications systems and data links, as well as surveillance systems.

US defense spending began growing again last year after seven years of decline and is likely to continue rising for at least the next several years as terrorism and ongoing conflicts spur new investment. British spending in the sector is also growing, and BAE has multiyear contracts with both the US and UK that should provide solid growth and income.

Revenue was $24.3 billion last year and should grow to $25.5 billion this year and $26 billion in 2018. The substantial dividend of $1.21/ADR (American Depositary Receipt)/yr. recently yielded 3.8% and appears secure.

Fiscal year: December. Earnings per share: 2018 est./$2.45…2017 est./$2.29…2016/$2.06.

Jennifer D. Miller is international equity portfolio manager at J.M. Hartwell LP, New York City, which manages $535 million. JMHartwell.com