L-3 produces attractive cash flows, generating enough wherewithal to pay down its debt and offer investors a 2.6% dividend yield. The black cloud of defense cuts has already been priced into shares of LLL, a fact that helps to reduce the risks for investors who are only now looking at this $7 billion stock. A bargain price and a history of returning cash to shareholders makes LLL look like a good way to get defense sector exposure in 2013.

St. Jude Medical

Cadiovascular device maker St. Jude Medical ( STJ) makes the world's most widely used mechanical heart valve as well as drug delivery systems, pacemakers, and defibrillators. In the last year, this heart health firm has returned a 13% shareholder yield to investors.

The combination of an aging global population and heart disease's status as the leading cause of death in western countries gives St. Jude some substantial tailwinds in the next few years. St. Jude has done yeoman's work in developing medical devices that prolong lives, and as R&D spending stays strong, it doesn't look likely to lose the leading position it enjoys in many of its medical device areas.

While growth-by-acquisition has been key to STJ's strategy, more than half of the firm's debt load is effectively wiped out by its cash on hand -- and it's been paying down those obligations at a breakneck pace. This firm's combination of stock buybacks, a 2.55% yield, and debt extinguishment mean that investors have a $1.5 billion bigger claim to STJ's assets than they did just a year ago. As that trend of returning value to owners continues, we should see that reflected better in this company's share price in 2013.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

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