President Donald Trump's defense strategy has been making waves with buyback threats and a massive $1.5 trillion budget proposal. But once you tune out the policy noise, the question for investors becomes much more straightforward: which defense stock actually offers the best value if military spending really takes off?

The answer isn't obvious, because Lockheed Martin Corp (LMT), RTX Corp (RTX), and Northrop Grumman Corp (NOC) are priced very differently right now. Let's look at what the numbers are actually saying.

Lockheed Martin: Paying for Predictability

Lockheed Martin carries a market cap around $115 billion with a trailing P/E near 28, according to market data. That sounds rich until you notice the forward P/E drops sharply to approximately 17, suggesting investors expect earnings to grow substantially as future contracts kick in.

The EV/EBITDA ratio of roughly 17.4 positions Lockheed as a steady compounder rather than a bargain-basement opportunity. This isn't deep value territory. It's a stock priced for consistent execution if production ramps materialize as anticipated.

RTX: Premium Quality, Premium Price

RTX sits at the top of the valuation ladder. With a market cap approaching $249 billion, a trailing P/E above 38, and a forward P/E near 28, the market is clearly pricing in optimistic expectations.

Its EV/EBITDA of about 19 reflects confidence in the company's scale and diversified operations, but that lower earnings yield means investors are paying a premium. RTX absolutely benefits if defense spending surges, but there's not much cushion if things don't go exactly to plan.

Northrop Grumman: The Quiet Value Play

Northrop Grumman presents the most compelling valuation case. Its trailing P/E sits near 21, forward P/E just under 20, and EV/EBITDA below 14—comfortably the lowest of the three. Throw in the highest earnings yield among this group, and Northrop emerges as the most conservatively priced option for playing increased defense spending, especially given its exposure to long-cycle and classified programs.

If that $1.5 trillion defense budget becomes reality, the choice comes down to style: RTX represents the premium bet, Lockheed offers the execution-focused trade, and Northrop provides the value anchor where expectations haven't run ahead of fundamentals.