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Goodwin‘s (LSE:GDWN) been the biggest FTSE 250 success story of 2025. The stock’s up more than 190% since the start of January.
While artificial intelligence (AI) has – justifiably – been the story catching investor attention this year, it’s not the only part of the stock market that’s been seeing success.
Defence
So far, 2025’s also been an outstanding year for companies that supply into the defence industry. Increased NATO spending has caused strong sales growth almost across the board.
This is a key market for Goodwin, which makes components that go into military jet engines. And according to the company, the effects are set to show up in its full-year results.
Profit before taxes is expected to be around £71m, which is double what the FTSE 250 firm achieved a year ago. Moreover, shareholders stand to benefit in the very near future. Earlier this week, Goodwin announced a special dividend of 532p per share to be paid in November. That’s in addition to (and a big boost to) its regular 140p distribution.
That means investors who bought the stock at the start of the year are not just up 190%, they’re also about to get 8.5% of their original stake back in cash next month.
That’s a truly outstanding return. And I think there are a few important insights that investors can take from this when it comes to looking for future opportunities.
Investing inisghts
The first thing I think investors should take from Goodwin’s success is that it’s not all about AI. The S&P 500‘s made it look like this, but that’s not the case. There are other important themes at the moment and the rise in defence spending has been one of them. So even in an AI-led stock market, there are still other opportunities.
Second, investors shouldn’t be too quick to think they’re too late to take up an opportunity. It’s easy to think that higher defence spending is reflected in current share prices, but this isn’t always so.
Ongoing conflicts might ease and this could weaken short-term demand for companies like Goodwin. But investors shouldn’t just assume higher spending’s already factored in.
Third, long-term strength’s important. Unlike the majority of FTSE 250 companies, Goodwin’s still largely founder-family-owned and this can be a big advantage.
Businesses such as these are often in a better position to look beyond the next earnings report. And this creates a better alignment with long-term shareholders.
What to do?
Goodwin shares trade ex-dividend next Friday (7 November). So anyone who buys the shares afterwards that won’t receive the 532p special distribution.
I’ll be interested to see what happens to the stock at that point. I expect it to fall as the firm’s value should go down due to it having less cash on its balance sheet. At that point, I’ll take another look.
But I’m certainly wary of thinking it’s too late to benefit from the effects of higher defence spending on the company’s share price.
