Defense stocks still deserve to be on your radar screen.

What's hot: Defense stocks have been torpedoed over the last month on trade war fears. Shares of Boeing ( BA - Get Report) , Raytheon ( RTN - Get Report) and General Dynamics ( GD - Get Report) -- the top three defense stocks often played by investors -- have nosedived about 8% in four weeks time. It may be time for investors to start wading back into these 2017 high-fliers given their strong financials, solid dividend payouts and bright future prospects. One worthy name is missile defense player Raytheon, says RBC Capital Markets. "We view Raytheon as among the most favorably positioned defense companies based on its leading market positions in missile defense systems and missiles, which are seeing intense investment that we expect to continue for the foreseeable future," says RBC Capital Markets analyst Matthew McConnell. 

At a glance: Raytheon generates among the highest percentage of sales from international markets, putting it in prime position to capitalize on international threats. International sales tend to come with higher profit margins, McConnell notes, adding that Raytheon is proactive at deepening its international relationships. Raytheon also has shown a strong desire to invest in its business to widen its competitive advantage. Says McConnell, "The quantity and quality of Raytheon's R&D have been a differentiator, creating strong technologies in high-demand product categories including air and missile defense, radar, electronic warfare, and cyber."

Why investors should care: Raytheon's solid foundation puts it in the catbird seat in two shareholder friendly areas. First is to continue to notch strong high margin international sales that likely lead to earnings upside. McConnell says Raytheon is pursuing "marquee" programs with Kuwait and Poland, to name a few. That business positioning sets the stage for richer dividends and buyback plans. "We believe Raytheon has the most capital-allocation capacity of the defense primes and is well positioned for a capital-allocation catalyst including further dividend increases or share buybacks in excess of what we currently model," says McConnell.

What Jim Cramer's research team says: Raytheon is a holding in Jim Cramer's Action Alerts PLUS member club. To learn why Cramer and his research team are bullish on Raytheon, click here. But this is a brief snapshot into their thinking, "Worldwide, whether it be to reach treaty agreement minimums or out of protection and deterrence, countries are spending more on defense. Contracts are coming from regions where it is broadly expected such as the Middle East, and even countries not known for their military focus such as Poland are dipping into their wallets and giving Raytheon business."

Bonus clip: Watch what Boeing's CEO Dennis Muilenburg told TheStreet about defense spending in 2019.