General Dynamics Corporation’s (GD - Free Report) business unit, Land Systems, recently secured a contract to provide Stryker DVHA1 combat vehicles. The deal has been awarded by the U.S. Army.
Valued at $712.3 million, the contract is an extension of a five-year contract the company clinched in 2020, with an extendable option for a sixth year. Per the deal, General Dynamics will deliver 300 Stryker DVHA1 combat vehicles to the U.S. Army.
What’s Favoring General Dynamics?
Nations have increased their defense spending on military equipment and various arsenals to strengthen their defense capabilities. The surge in the demand for defense products is primarily due to rising geopolitical tensions and amplified terrorist threats.
Hence, combat vehicles equipped with varied offensive abilities form an integral part of any defense system. Buoyed by their defensive and offensive capabilities, combat vehicles have registered strong growth in demand and are likely to witness huge investments by nations to procure them.
In such a scenario, General Dynamics’ Land Systems, the prime contractor of such remarkably efficient and technologically advanced combat vehicles, is likely to continue to witness a strong order inflow from the Pentagon. The latest contract win is a bright example of that.
Growth Prospects
Per the report from the Markets and Markets firm, the global armored vehicle market is projected to witness a CAGR of 3.1% during the 2022-2027 period. Such abounding growth trends indicate ample growth opportunities for General Dynamics as it enjoys a lucrative position in the production of combat vehicles.
A few other defense primes that can reap the benefits of the aforementioned market growth prospects are BAE Systems (BAESY - Free Report) , Northrop Grumman (NOC - Free Report) and Raytheon Technologies (RTX - Free Report) .
BAE Systems’ Challenger 2 is heavily armored and highly mobile, designed for use in the direct fire zone. Its primary role is to destroy or neutralize the armor. It also has the ability to engage both hard and soft targets and can operate across a spectrum of high-intensity conflicts, counter insurgencies and peacekeeping roles.
The long-term earnings growth rate of BAESY is projected at 13.7%. Shares of BAE Systems have rallied 19.7% in the past year.
Northrop Grumman specializes in innovating low-cost, highly-reliable, precise weapons and ammunition for artillery and mortar systems, medium-caliber weapon platforms, battle tanks and individual soldiers.
Northrop Grumman’s long-term earnings growth rate is projected at 3.8%. Shares of NOC have returned 2.3% value to investors in the past month.
Raytheon, in collaboration with American Rheinmetall Vehicles, designed an infantry fighting vehicle, the Lynx OMFV Infantry Fighting Vehicle. It is a next-generation, tracked, armored fighting vehicle designed to address the critical challenges of the future battlefield. The design includes RTX systems for combat vehicles.
Raytheon’s long-term earnings growth rate is pegged at 8.3%. Shares of RTX have returned 3% value to investors in the past year.
Price Performance
Shares of GD have increased 3.3% in the past month compared with the industry’s growth of 3.2%.
Zacks Rank
General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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General Dynamics Corporation’s (GD - Free Report) business unit, Land Systems, recently secured a contract to provide Stryker DVHA1 combat vehicles. The deal has been awarded by the U.S. Army.
Valued at $712.3 million, the contract is an extension of a five-year contract the company clinched in 2020, with an extendable option for a sixth year. Per the deal, General Dynamics will deliver 300 Stryker DVHA1 combat vehicles to the U.S. Army.
What’s Favoring General Dynamics?
Nations have increased their defense spending on military equipment and various arsenals to strengthen their defense capabilities. The surge in the demand for defense products is primarily due to rising geopolitical tensions and amplified terrorist threats.
Hence, combat vehicles equipped with varied offensive abilities form an integral part of any defense system. Buoyed by their defensive and offensive capabilities, combat vehicles have registered strong growth in demand and are likely to witness huge investments by nations to procure them.
In such a scenario, General Dynamics’ Land Systems, the prime contractor of such remarkably efficient and technologically advanced combat vehicles, is likely to continue to witness a strong order inflow from the Pentagon. The latest contract win is a bright example of that.
Growth Prospects
Per the report from the Markets and Markets firm, the global armored vehicle market is projected to witness a CAGR of 3.1% during the 2022-2027 period. Such abounding growth trends indicate ample growth opportunities for General Dynamics as it enjoys a lucrative position in the production of combat vehicles.
A few other defense primes that can reap the benefits of the aforementioned market growth prospects are BAE Systems (BAESY - Free Report) , Northrop Grumman (NOC - Free Report) and Raytheon Technologies (RTX - Free Report) .
BAE Systems’ Challenger 2 is heavily armored and highly mobile, designed for use in the direct fire zone. Its primary role is to destroy or neutralize the armor. It also has the ability to engage both hard and soft targets and can operate across a spectrum of high-intensity conflicts, counter insurgencies and peacekeeping roles.
The long-term earnings growth rate of BAESY is projected at 13.7%. Shares of BAE Systems have rallied 19.7% in the past year.
Northrop Grumman specializes in innovating low-cost, highly-reliable, precise weapons and ammunition for artillery and mortar systems, medium-caliber weapon platforms, battle tanks and individual soldiers.
Northrop Grumman’s long-term earnings growth rate is projected at 3.8%. Shares of NOC have returned 2.3% value to investors in the past month.
Raytheon, in collaboration with American Rheinmetall Vehicles, designed an infantry fighting vehicle, the Lynx OMFV Infantry Fighting Vehicle. It is a next-generation, tracked, armored fighting vehicle designed to address the critical challenges of the future battlefield. The design includes RTX systems for combat vehicles.
Raytheon’s long-term earnings growth rate is pegged at 8.3%. Shares of RTX have returned 3% value to investors in the past year.
Price Performance
Shares of GD have increased 3.3% in the past month compared with the industry’s growth of 3.2%.
Zacks Rank
General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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