Update - September 27, 2022

This Defensive Play Is Crushing the Market

In times like these, a good defense is our best offense.

I know it’s cliché. Even writing the words hurt. But the truth is in the numbers.

Over the past year, our shares of KBR Inc. (KBR) are up 14%. The S&P 500 is down 15% over the same time frame.

Since we got in, this defensive play has outperformed the stock market by more than 3-to-1.

That’s a pretty darn good offense.

But it’s just getting started.

We all know “sustainability” is a big buzzword in the corporate world. It looms even larger in Washington, where the president recently allocated hundreds of billions of dollars to the idea through the grossly misnamed “Inflation Reduction Act.”

KBR, as the numbers above tell us, was doing just fine before this latest infusion of easy money. But now it’s about to do even better.

We’re already seeing the momentum build.

Just last week, the company announced a big contract in the carbon capture space. KBR is teaming up with a leader in the industry to help its clients meet their sustainability goals.

It’s big business. Together, the companies will build valuable carbon-capturing technology for the energy and chemical sectors. Carbon capture is an industry that is just getting started… and KBR is already emerging as a leader.

The company was just invited into a big study that will have it working to convert oil industry diesel generators to run on cleaner, ammonia-based fuel.

While things like solar, wind and EVs may be the next generation of energy… they’re only stepping stones. The long-term future of energy lies in truly alternative, clean sources like hydrogen and ammonia.

KBR, again, is a leader.

But don’t think the company is just another overpriced “green energy” play. It’s not. That’s only a tiny part of its business. If you recall, it’s the company’s ties to governments all around the world that originally got me excited about its prospects.

After all, where there is a government contract… there are big profits.

Take KBR’s latest deal with Uncle Sam. It’s part of a huge, $4.8 billion contract that will provide the Air Force with the latest logistical technology for intelligence work.

Again… big money in a quickly growing sector.

Contracts like this abound for the company. Yes, it’s not a sexy growth stock. It doesn’t have headline-grabbing technology. But the pricing action speaks for itself.

In times like these, indeed, a good defense makes a mighty offense.

If you don’t own shares of KBR, you should.