Readers of this space know that the preference is for long-term plays with companies with demonstrated business models (10 years), in an established market, with an average total annual return on equity of 20% during that span. It also helps if the company has a secular tailwind and/or is one of only a few players in a sector.

On the last point, Northrop Grumman Corp. (NYSE: NOC) ranks very high, and it fares reasonably well in the other categories, too.

Northrop is the U.S.'s No. 3 defense contractor and the No. 1 shipbuilder in the world. Analysts like NOC's operational diversity, cash flow, and solid balance, but the company's standout dimensions, from an investment standpoint, are its electronics systems business (21% of revenue) and its ship building business (17% of revenue).

The electronics business is likely to remain a key player in radar/navigation/communications systems, moving forward, and the ships business is also in a preferred position: it's one of only two nuclear-power submarine makers in the U.S. and the only builder of U.S. aircraft carriers. Of course, no one can predict with any certainty the role aircraft carriers will play in defense operations -- the aircraft carrier's demise has been predicted for (seemingly) the past three decades -- but the sense here is that these ships will retain a role in the decades ahead. The company also builds the B-2 stealth bomber and has a 25% stake in the F-35 next-generation, joint-strike fighter.