The Austal Ltd (ASX: ASB) share price closed at $6.22 on Friday, down 0.32% for the day and up 101% in 2025 so far.
You read that right.
This ASX industrial stock has been going from strength to strength, reaching a new record high of $6.53 last Monday.
Austal is an Australian shipbuilding company founded in 1988 in Perth, Western Australia.
It specialises in designing and constructing high-speed commercial and defence vessels.
Austal has shipyards in Australia, the United States, Vietnam, and the Philippines. Its clients include the US and Australian navies.
In 1H FY25, Austal delivered six ships and had 51 under construction or scheduled to commence construction.
At the Macquarie Conference last month, Austal said:
Governments are prioritising defence and security spending.
The naval market is expected to grow from €78 billion in 2024 to over €100 billion in 2033.
Given presence in Australia, the US and Asia, Austal is well positioned to supply the next generation needs of navies across the globe.
Austal has a record order book worth $14.2 billion, including two US contracts worth about US$600 million awarded in September 2024.
Austal is ideally positioned to capitalise on the emerging global defence investment theme.
Defence is in the spotlight because the US is insisting that Western nations spend more on defence amid growing global threats.
The US has asked NATO nations to raise their defence spending to 5% of gross domestic product (GDP).
The US would also like Australia to raise its defence budget from 2.1% to 3.5% of GDP.
Many investors are only just cottoning on to the investment implications of a global government defence spending spree.
But say you recognised the trend early and invested $10,000 in Austal shares a year ago.
How would that investment have performed?
$10,000 invested in Austal shares a year ago…
On 21 June last year, Austal shares closed at $2.40 apiece.
If you had put $10,000 into Austal shares then, it would have bought you 4,166 shares (for $9,998.40).
There's been a capital gain of $3.82 per share since then.
In other words, this ASX 200 industrial stock has shot the lights out.
Austal shareholders have enjoyed a 159% gain in just one year.
In dollar terms, that's a $15,914.12 gain for you.
Therefore, your $10,000 investment is now worth $25,912.52.
In terms of dividends, Austal has not paid dividends since 2023.
The company ceased paying dividends last year to support a large capex program to increase its shipbuilding capacity.
