US Defense Stocks With Backlog Strength After The Midterm Elections

Control of Congress is back in play after the US midterm elections, and defense and security stocks are sitting in the crosshairs of any shift in spending priorities, regulation and oversight. Policy headlines can move these tickers faster than earnings reports, which creates opportunity and risk for anyone tracking this space. This article walks through 3 US defense and security stocks exposed to the latest political news and why that matters for a diversified portfolio.

The three stocks covered next are just a sample, and the full screen surfaced 14 more US defense and security companies with equally compelling stories that are not broken out in this article. To size up that wider field and identify potential high conviction ideas, head straight into the US defense and security stocks screener.

Enpro (NPO)

Overview: Enpro is an industrial technology company that protects critical environments with sealing and advanced surface technologies, including aerospace and defense linked applications.

Operations: Enpro generates about US$780 million from Sealing Technologies and US$444 million from Advanced Surface Technologies, with roughly US$694 million earned in the United States and the balance mainly from Asia Pacific and Europe.

Market Cap: US$5.7b

Enpro fits this defense and security screen as a protection focused industrial player whose critical sealing and surface solutions support sensitive infrastructure that matters when security spending priorities shift.

"Capacity expansions in Enpro’s Advanced Surface Technologies business, including higher 2026 capital expenditure directed toward facilities in Arizona, Milpitas and Taiwan, are aligned with customer build plans that currently provide visibility through 2027 and are expected to influence future revenue and segment margins as this semiconductor and AI investment cycle plays out."

What happens to Enpro’s earnings power if a single assumption about the durability of that semiconductor driven demand curve breaks?

If that earnings power question matters to you, read the full narrative for Enpro to see how Enpro’s cycle exposure, balance sheet and capital plans really interact.

Graham (GHM)

Overview: Graham Corporation designs and builds vacuum, propulsion, cooling and life support hardware that underpins US defense and space programs.

Operations: Graham generates about US$261 million from designing and manufacturing heat transfer and vacuum equipment, with roughly US$228 million coming from US customers.

Market Cap: US$821 million

Graham matters for this defense focused screen because its propulsion, power and thermal systems plug directly into long life Navy and space hardware. In this context, budget decisions typically play out over decades, not quarters.

"Record backlog of about $557 million with roughly 35% to 40% expected to convert within 12 months, together with about 85% of that backlog tied to defense, points to multi year revenue visibility that some investors may not be fully reflecting in Graham’s current valuation, with potential future support for earnings stability."

What happens to Graham’s longer term margin story if a single assumption about how that mix rich backlog converts fails to hold?

That margin puzzle is exactly what the full narrative for Graham unpacks, showing how Graham’s backlog mix, contract risk and potential upside could be quietly decoupling from headline numbers.

ESCO Technologies (ESE)

Overview: ESCO Technologies provides engineered components, testing systems, and filtration solutions for aviation, navy, and defense customers, with additional utility and RF applications.

Operations: ESCO Technologies generates about US$633 million from Aerospace & Defense, US$392 million from Utility Solutions, and US$267 million from Test products and systems.

Market Cap: US$6.2b

ESCO Technologies ties directly into this defense and security screen through its aviation and naval hardware. Its broader testing and grid exposure may provide an additional layer of political and spending resilience when Washington’s priorities change after an election.

"Record consolidated book to bill of 1.21 and backlog of US$1.54b, with all three segments above 1.0 book to bill, is cited as signaling multi quarter revenue support as ESCO Technologies converts existing orders to sales and earnings."

Investors may want to consider what happens to that promising backlog if an assumption about how efficiently ESCO Technologies turns those defense linked orders into margins changes.

If you care about how efficiently that backlog can accelerate or stall ESCO Technologies’ earnings power, the full narrative for ESCO Technologies breaks down the moving parts in plain English.

Seeking Alternatives Before The Crowd?

Fresh stock ideas often move first, and hesitation can mean watching breakout moves from the sidelines while momentum is already flying. Scan these under the radar lists while it matters and act according to your own research and risk tolerance.

• Explore companies with resilient balance sheets and disciplined cash generation by running the list of solid balance sheet and fundamentals (24 results) instead of focusing on potentially weaker stories.
• Scan for income-oriented stocks with relatively high yields using the 4 dividend fortresses and identify payouts that may help provide stability when prices are volatile.
• Follow developments in automation through the 95 robotics and automation stocks and monitor businesses that are involved in the hardware behind factory upgrades and productivity improvements.

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