ST Engineering's Wide Moat Rating Based on Defense Strength

ST Engineering is driving growth through improved utilization of its capital alongside a plan to contain costs. It has sold and continues to offload noncore activities to focus on areas that will provide synergies to its key commercial aerospace, defense, and smart city activities. Overall, we see STE’s EPS growing at a five-year compound annual growth rate of 18% on revenue CAGR of 11%. Cost cuts and improved scale benefits drive a stronger bottom-line growth over revenue.