Boom in returns for shareholders after increases in arms spending by governments. Investments are also growing
European defense companies have paid 5 billion euros to shareholders in dividends and buybacks, a remuneration that stands at a 10-year high thanks to the boom in government spending on armaments. This was revealed by an analysis carried out for the Financial Times by Vertis Research which examined the eight major arms producers on the continent: the Italian Leonardo (which doubled the coupon this year)the German Hensoldt and Rheinmetall, the French Thales and Dassault, the Swedish Saab and the British Bae Systems and Babcock.
The boom in orders
The sum returned to shareholders is likely to increase in 2026 on the back of greatly increasing orders due to the war in Ukraine and the resulting arms race by European countries. The growth in dividends of defense companies, however, the English newspaper notes, could create some tension with their clients, i.e. governments. In the United States, for example, Trump recently invited arms manufacturers to invest more in production capacity and innovation than in coupons and buybacks. The same request could come from European executives who are rushing to strengthen their armies to face a possible Russian advance and the simultaneous American retreat.
The debate
The contemporary arms race and dividends revive the debate regarding the opportunity to privatize the defense industry. On the one hand, there are those who argue that the listing of weapons manufacturers on the stock exchange promotes efficiency and innovation. On the other hand, there are those who believe that, on the contrary, it introduces undue incentives to increase revenues and profits in an area, that of the legitimate defense of the territory with military force, which should be a monopoly of governments
December 29, 2025
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