RTX vs. General Dynamics: Which Defense Contractor Offers More Upside?

Growing defense budgets and rising geopolitical tensions continue to create opportunities across the aerospace and defense industry, benefiting companies like RTX Corporation RTX and General Dynamics GD. Both companies have strong order backlogs that provide revenue visibility and support their long-term growth prospects.RTX has a diversified business that includes commercial aerospace and defense operations. The company is benefiting from strong demand for its Pratt & Whitney aircraft engines and Collins Aerospace systems as global air travel continues to recover. Its defense business is also supported by demand for missile systems, radar technologies and other advanced military solutions.General Dynamics is a leading defense contractor with operations across aerospace, marine systems, combat systems and technologies. The company benefits from demand for its Gulfstream business jets, military vehicles, naval platforms and technology solutions. Its broad exposure to U.S. defense programs and long-term government contracts supports steady business growth.As global defense spending continues to rise and military modernization remains a priority for many countries, both RTX and General Dynamics are well-positioned to benefit from these trends. However, a closer comparison of their financial performance and growth outlook can help determine which stock currently offers the stronger investment opportunity.Tailwinds for RTXRTX continues to strengthen its business through investments that expand its aerospace and defense capabilities. In June 2026, its Collins Aerospace unit announced a $63 million investment to expand its maintenance, repair and overhaul (MRO) facility in Malaysia. The larger facility will help RTX support the region's growing aircraft fleet and rising demand for maintenance services.The company is also increasing its defense production capacity. Earlier in the month, RTX announced a $100 million investment to expand its facility in Portsmouth, RI. The expansion will support higher production of Patriot GEM-T subcomponents and increase testing capacity for the Lower Tier Air and Missile Defense Sensor, helping the company meet growing demand for air and missile defense systems.These investments reflect RTX's focus on expanding its aerospace services and defense operations, which should support its long-term growth prospects.Tailwinds for GDGeneral Dynamics continues to win new contracts across its defense and technology businesses, reflecting solid demand from the United States and international customers. Significant awards won by GD in the last reported quarter included a $15.4 billion contract for continued design and support work on the Columbia-class submarines program.In the fourth quarter of 2025, the company received two contracts for more than $4 billion for its EAGLE tactical vehicles from Germany. The company also received contracts worth $600 million for its bridges from Norway and the United Kingdom. Moreover, the company received a contract worth $640 million for its light armored vehicles and additional logistics vehicles from Canada.Proposed increases in U.S. defense spending may further support growth, especially for its Marine Systems unit.How Does the Zacks Consensus Estimate Compare for RTX & GD?The Zacks Consensus Estimate for RTX’s 2026 sales and earnings per share (EPS) implies an improvement of 5.7% and 9.9%, respectively, from the year-ago quarter’s reported figures. The stock’s annual bottom-line estimates have moved north over the past 60 days.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for GD’s 2026 sales and earnings per share (EPS) implies an improvement of 4.7% and 7.2%, respectively, from the year-ago quarter’s reported figures. The stock’s annual bottom-line estimates have moved north over the past 60 days.Image Source: Zacks Investment ResearchStock Price Performance: RTX & GDIn the past year, RTX has outperformed GD. While RTX’s shares surged 28.2%, GD surged 22.2%.Image Source: Zacks Investment ResearchValuation for RTX & GDGD is trading at a forward sales multiple (P/E F12M) of 1.66, below RTX’s forward sales multiple of 2.53.Image Source: Zacks Investment ResearchSurprise HistoryRTX delivered an average earnings surprise of 12.65% in the last four quarters, while GD delivered an average earnings surprise of 5.27% in the last four quarters.Final CallBoth RTX and General Dynamics are well-positioned to benefit from rising global defense spending and ongoing military modernization efforts. GD continues to secure major defense contracts and offers exposure to naval platforms, combat systems and business jets.RTX, however, appears to have a slight edge. The company benefits from a balanced mix of commercial aerospace and defense businesses, providing multiple growth drivers. Its earnings and revenue growth expectations for 2026 are stronger than GD's, and the company has recently announced strategic investments to expand both its aerospace services and defense production capabilities.RTX has also delivered stronger stock price performance over the past year and a better earnings surprise track record than General Dynamics, reflecting solid execution across its businesses.Both RTX and GD currently carry a Zacks Rank #3 (Hold). However, considering RTX's stronger growth outlook, recent investments and better share price performance, it stands out as the more attractive choice right now.You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. 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