War is good business.

The U.S. has been in a continuous state of war or war readiness since Dec. 7, 1941.

While the war in Afghanistan ended for the U.S. in 2021, the United States is now the largest western supplier for the War in Ukraine, which began in earnest a year ago.

This has been very good for investors in defense stocks. While the Nasdaq is down 14% over the last two years, the biggest defense stocks are up an average of 40%. Most also pay fat dividends.

War may be all hell, as William Tecumseh Sherman wrote. But it is phenomenally profitable. It’s one of the primary reasons America remains the world’s dominant power. America is quite good at it.

Unsurprisingly then, the U.S. is also very good at running defense companies. When government funding lags, defense contractors merge around the latest technologies. When funding rises, the survivors control the resulting market growth.

As an investor, you can do quite well with the usual defense suspects. But the best performer lately doesn’t make weapons at all. Here are the five best defense stocks to buy (with dividends) for February 2023.

Best Defense Stocks for February: Cadre Holdings (CDRE)

Cadre Holdings (NASDAQ:CDRE), based in Jacksonville, Florida, makes safety and survivability equipment. Its brands include Safariland, which makes its body armor, Med-Eng, whose products protect soldiers and police from blasts, and Armor Systems.

Armor CEO William Kanders led the investor group that bought Armor from European aerospace company BAE Systems (OTCMKTS:BAESY) in 2012 for $124 million. He still controls 77% of the stock, which came public in November of 2021. Cadre is now worth $853 million and Kanders serves as executive chairman. CDRE stock is up over 50% since its initial public offering (IPO).

Since coming public, Cadre has made some small acquisitions, buying European holster company Radar Leather and chemical illumination company Cyalume. Both were said to be adding to earnings at the time of the deals.

Cadre has big civilian markets as well as military contracts, protecting the first responders with body armor and other equipment. Cadre had sales of $111.5 million in the September quarter, on which it earned a net income of nearly $5 million, 13 cents per share. Operating cash flow came in at $29.5 million. For the December quarter analysts are expecting 21 cents per share of earnings and $115.7 million in sales. Those numbers are due on March 9.

If you want growth in defense but don’t want to buy a weapons company, Cadre may be a good choice.

Northrup Grumman (NOC)

Over the last two years, Northrup Grumman (NYSE:NOC) stock is up 49%. It has also delivered $11.35 per share in dividends, a yield of 1.56% at its Feb. 7 price of $445 per share. And NOC’s dividend has increased during that time by 20%.

Northrup Grumman turns every advance of Silicon Valley into defense equipment. Whether it’s artificial intelligence, robotics. or the latest chips, the company has an inside track on guaranteed profits from government contracts.

Northrup Grumman gets 88% of its revenue from defense contracts and had $31.4 billion worth of them last year. In the December quarter, it turned 20% of $10 billion in revenue into net income. The company makes planes like the recently revealed B-21 stealth bomber, unmanned craft like the Global Hawk, and the back-end technology controlling them.

A Goldman Sachs downgrade of the sector sent the stock plunging in January, despite management raising its sales forecast. Analysts are worried about whether the new B-21 stealth bomber can be profitable, and about Republican calls for defense spending cuts. One of the 15 analysts following the stock at Tipranks even has the sell light on.

But hawks always have something to worry about, and the U.S. isn’t the only customer for what Northrup Grumman offers. You don’t have to rush into this stock, but you can accumulate it on weakness, set it aside, and see a long-term profit. It’s currently selling for just 14 times earnings.

Best Defense Stocks for February: General Dynamics (GD)

Over the last two years, General Dynamics (NYSE:GD) stock is up 46%. It has delivered $9.80 per share in dividends and has a current yield of 2.17%. At its recent price of $228 per share, the company was worth over $62.5 billion, just over 1.5 times last year’s $39.4 billion in revenue.

General Dynamics makes submarines, guided missile destroyers, and is best known today for the M1 Abrams tank. It also makes the Gulfstream business jet.

General Dynamics was the 5th largest defense contractor last year, coming in behind Northrup Grumman with $30 billion of revenue. Nearly one-quarter of revenue came from outside defense, mainly from Gulfstream, but it is expanding in the non-defense market for supercomputers.

However, it’s the Abrams, which Ukraine very much wants, that has been getting the headlines lately. The tank comes with lucrative service contracts. Blackrock (NYSE:BLK) recently bought more shares, raising its stake in the company to 5.7%.

Value investors like GD stock a lot, calling it a “wealth compounder.” Its January weakness doesn’t change the investment case, which is based on long-term dividend returns. The weaker the stock gets, the better that dividend will look. The company is good for it. Of 12 analysts now following General Dynamics stock at Tipranks, eight are saying buy it, and none are suggesting a sell.

Lockheed Martin (LMT)

Over the last two years, Lockheed Martin (NYSE:LMT) stock is up 38%. It has delivered $22 in dividends during that time. It recently announced another $3 per share will be paid out to shareholders of record on Feb. 28. At $465 per share, it has a market capitalization of $119 billion, a price-to-earnings ratio of 21.5, and a current yield of 2.56%.

Lockheed Martin is the nation’s largest defense contractor, with $61.5 billion in contracts during 2021.  It is also the contractor most dependent on the government with 97% of revenue coming from the Department of Defense.

Lockheed makes the F-35 fighter jet, Sikorsky helicopters, and the AEGIS combat control system. It has contracts with NASA and other public and private space-focused entities. It has also developed hypersonic missiles, which can travel 25 times the speed of sound.

The profits should keep rolling in, because Lockheed has a huge backlog of orders, especially for the F-16 fighter jet. It continues to have ties deep in the federal government. Johnathan Caldwell, general manager of its military space division, got an advisory appointment from the Biden administration this month.

Analysts are more supportive of Lockheed Martin than its competitors. Credit Suisse recently moved it from a “sell” to a “buy” based on accelerating growth. This may be the first of several upgrades. Right now, the average Tipranks rating is a hold.

Best Defense Stocks for February: Raytheon Technologies (RTX)

Over the last two years, shares in Raytheon Technologies (NYSE:RTX) are up nearly 39%. During that time, it has also delivered $4.16 per share in dividends. At about $97 per share, it has a market cap of $144 billion, a price-to-earnings ratio of 28, and a yield of 2.53%.

Think of Raytheon as the military’s rocket men. It is a primary supplier to other defense contractors but also brings them in on some projects.

Raytheon is best known for missiles, but it also makes Pratt & Whitney jet engines and owns Collins Aerospace, which supplies the military with space assets. This has made it the second-largest military contractor, bringing in nearly $42 billion in 2021. That’s 65% of its total revenue, which came to $64 billion last year.

Raytheon’s dominance in key rocket and space niches gives it a bright future, and not just in defense. Most of its profit gains are coming in from Collins or Pratt & Whitney contracts outside defense.

That’s because Pratt & Whitney powers commercial airliners and the engines have a big aftermarket. The company delivered $4.9 billion in free cash flow last year, most of it in the fourth quarter, earning $1.4 billion, $1.27 per share, on $18 billion in revenue. Another dividend increase is likely. Of 13 analysts following Raytheon at Tipranks eight say buy it, and five are in the “hold” camp. None say “sell.”

On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.