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I proposed Raytheon to my club last week and we bought some.  In addition to any new contracts, there is the military resupply ongoing.  They are using up stuff in Iraq that needs replacing.  Even if a Democrat gets in the White House next year and starts bringing the soldiers home from Iraq, expended material will still need to be replaced.  Therefore, I think Raytheon is a pretty safe bet, (or I wouldn't have proposed it to my club for a new puchase last week).  Raytheon is ranked higher on my spreadsheet, so I would chose that over Waste Management, even though I think that Waste Management is a good company with good prospects.

That being said, it also depends on what else is in your portfolio.  If you already own Lockheed, Boeing and General Dynamics in your portfolio, I would not add Raytheon, as that would make too many defense contractors in the same portfolio.  If your portfolio is full of energy and consumer staples companies, then I think Raytheon would be a good addition.

Also, on a side note, I think you should put L-3 on your watchlist, (symbol = LLL).  They have done very good for my investment club and I think they are a good holding at this time.  They might be a good addition in the future, though they do have some sector overlap with Raytheon, since both are defense contractors.

Good luck with whichever one you choose.  I think both of them would be good additions.  I do like dividends though, so the higher dividend makes Raytheon more attractive to me.  

One other thing.  I think you are looking at it wrong when you state "WMI is also a lot cheaper than RTN though, so I could get a much larger stake".  By this I am assuming that you mean that you could afford more shares of WMI than you could RTN with the same amount of money.  This is the wrong way to look at things.  Buying 10,000 shares of a crappy $5 company is not better than buying one $50,000 share of Berkshire Hathaway.  It is not how many shares you can buy, it is what those shares can do for you.  If your 10,000 shares of a $5 company goes up 10% over the year and your one share of $50,000 Bershire share goes up 5% for the year, you still make the same amount of money on both.  Just because one share is $5 each and the other share is $50,000 each doesn't mean that one is more likely to go up than the other.  It is the fundamentals of the company that will drive the price, by and large, over multi-year spans of time.  (Speculation or pump/dump schemes would be more likely on a $5 share than a $50,000 share, so the cheaper stock could get larger short-term movements, but longer-term, this volatility is generally not what makes you your money if you plan on holding for the long term.  Just thought I would point this out to you.

Again, good luck with whichever one you choose, (especially if you choose RTN, as I own that one so would be more interested in them doing well).



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