The U.S. generates more foreign sales of weapons systems than any other nation, with aircraft ranking among its fastest-growing military exports, notes John Persinos, a defense analyst for the Teal Group and contributing editor to Personal Finance.

No name is more synonymous with airplanes than Chicago-based Boeing (BA), the world's largest aircraft manufacturer. Along with passenger planes, it sells many fighter jets central to America's air power and popular with rising developing nations, notably the F/A-18 E/F Super Hornet.

Boeing also makes mission-critical helicopters, such as the AH-64 Apache and CH-47 Chinook. Demand for these jet fighters will continue filling Boeing's coffers with cash for years to come.

Another tailwind is the company's carbon composite Dreamliner 787, a "game changer" in aviation. The long-range, mid-size, wide-body passenger jet is fuel-efficient, quieter, easier to maintain and ultra-durable.

Airlines around the world are lining up in droves to order the Dreamliner 787 to replace their aging, fuel-guzzling fleets.

With a trailing 12-month price-to-earnings ratio of 23.9, Boeing shares are roughly in line with the trailing P/E of the aerospace and defense sector.

The consensus among analysts is that Boeing's earnings growth will hit 16% over the next five years on an annualized basis. The yield is an equally robust 3.17%, making the stock an enticing total return package.

Next to Boeing, the $2.6 billion Esterline (ESL) seems puny; but like Boeing, this aerospace electronics company straddles both the defense and commercial aviation industries.
Esterline is play on not only military aircraft spending but also technological disruption in the cockpit. Commercial and military aircraft incur their highest expenditures on fuel.

The strategy for minimizing that cost is simple: Lighten the aircraft so that it's more fuel-efficient. One way is to digitize all functions performed with conventional gauges or paper.

This economic imperative is boosting sales of the super-light, miniaturized avionics that Esterline provides for commercial and defense customers in the U.S. and internationally.

The company's products include electronic flight bags, global positioning systems, pilot displays, aircraft sensors, electrical power switching, and control and data communication devices.

Along with cockpit avionics for military aircraft, the company also makes combat-hardened personal communication equipment, primarily headsets. With more money budgeted for these items this fiscal year, the Pentagon is becoming Esterline's personal cookie jar.

With a trailing P/E of 23.7, the stock is attractively valued considering that Wall Street expects Esterline's earnings to rise an annualized 12% over the next five years.

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