Best Stocks to Buy During Wartime

In 2026, the geopolitical context remains marked by a multiplication of hotspots of tension, notably since the Israeli-American strikes in Iran in late February 2026. Beyond this conflict, a sustained rise in defense budgets is observed, an energy crisis that is not fully resolved, and a lingering health security concern in people’s minds.

In this frame, many investors are looking at how to invest in the stock market during wartime with stocks able to withstand shocks, or even to profit from them: companies positioned in defense, energy or health, with recurring revenues and strong visibility. This article offers a selection of three European defensive equities, two of which are eligible for the PEA, that combine solid balance sheets, positive cash flows, stable dividends, and direct or indirect exposure to international tensions.

How Café de la Bourse Selected the Best Stocks in the Stock Market During Wartime?

A universe of defensive and sufficiently liquid stocks

We have selected companies listed on major indices (CAC 40, STOXX Europe 600, FTSE 100), with significant market capitalization and high daily volumes, allowing entry and exit without major difficulty. These companies are positioned in so-called “defensive” sectors: military defense, utilities and energy, pharmaceuticals and health in particular. This approach aims to select stocks that are both structurally resilient and easy to trade for a private investor.

Fundamental analysis: debt, profitability and cash flow

We applied, as part of our fundamental analysis, various quality criteria on valuation, return on capital, indebtedness and cash generation. The selected companies exhibit:

• a price-to-earnings ratio (P/E) aimed at under 25 times normalized earnings, which remains demanding for quality stocks.
• a return on equity (ROE) above 15% over the last full year or in the recent average, indicating a proven ability to create value for shareholders.
• positive and significant free cash flow in the 2025 fiscal year, enabling financing of investments, debt and shareholder remuneration.
• managed debt with a target net debt/EBITDA below 2x or a clear deleveraging trajectory. We scrutinized the balance sheets for prudent debt ratios.

Stable growth of revenues and profits

In a context of tensions and slowing growth, we seek companies that nonetheless manage to grow their revenues and earnings: revenue growth of at least +5% in the last full year, earnings per share (EPS) growth above 10%, with good visibility for the years to come (order books, long-term contracts).

Exposure to structural trends and natural leadership

Rearmament and modernization of armed forces, energy transition, aging of the population… We favored leading players, endowed with durable competitive advantages with substantial order books, significant market shares, and a strong competitive edge: intellectual property, specific industrial know-how, high entry barriers.

Resilience to risks and volatility

Finally, the selected stocks should show an overall positive exposure to geopolitical tensions or, at least, limited sensitivity to traditional economic cycles. Moderate volatility (target beta below 1.2) acts as a buffer in a diversified portfolio. We also selected stocks with stable or rising dividends, providing regular remuneration even during market corrections.

Top 3 Best Stocks in the Stock Market During Wartime