The aerospace and defense sector has turned into one of the market’s steadier income plays this year, with the S&P Aerospace & Defense Select Industry Index ($SIAD) up 27% over the past year. That rally has gone hand in hand with a wave of dividend hikes across the group as companies lean on record backlogs and strong free cash flow to return more cash to shareholders, even with sharp stock swings along the way.
The U.S. aerospace and defense market is also in a strong growth phase, valued at $463.06 billion in 2026 and expected to reach $610.15 billion by 2031. That marks a compound annual growth rate (CAGR) of 5.67%.
