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General Dynamics (GD) Announces a Hike of 4.8% in Dividend
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General Dynamics Corporation (GD - Free Report) recently announced that its board of directors approved a hike in its quarterly dividend to $1.32 per share, up 4.8% from the prior payout.
With the current hike, the company will now pay out an annual dividend of $5.28 per share. This represents an annual dividend yield of 2.33% based on its share price worth as of Mar 8. The annualized dividend yield is higher than the Zacks S&P 500 composite’s yield of 1.59%.
This signifies General Dynamics’s strength in business to generate enough cash flow to reward shareholders with improved dividend payout
Will General Dynamics Sustain Dividend Hikes?
The increase in the dividend payout is backed by strength in the business, which enables the company to register growth in earnings and sales. Hence, it is imperative to mention that General Dynamics recorded a 5.6% increase in its earnings in the last reported quarter, while sales recorded a growth rate of 5.4% from the previous year’s reported figure. Such improvement in numbers must have triggered the hike in the dividend payout for shareholders.
Also, the ability to distribute excess cash to shareholders is underpinned by a company’s strategy and strong cash flow position. In this context, it is imperative to mention that the company recorded a growth of 7.2% in cash flow from operating activities, while its free cash flow registered an increase of 2.4% in 2022. Such enhancement in cash positions complements a company’s intent to increase dividends for shareholders.
General Dynamics’ backlog strength also plays a significant role in accomplishing the objectives of its business and supporting such dividend payouts. It recorded a total backlog of $91.10 billion in the fourth quarter of 2022, up 2.6% from third-quarter 2022’s backlog of $88.80 billion.
All the aforementioned factors collectively enabled the company to consistently increase dividends for its shareholders. The company paid a total dividend of $1.4 billion in 2022, compared with $1.3 billion in 2021 and $1.2 billion in 2020. General Dynamics’ has a long history of increasing annual dividends and has been doing the same for the last 26 years. The company repurchased 5.3 million of our outstanding shares for $1.2 billion in 2022 while it has 6.7 million remains in its authorization to be repurchased.
Courtesy of the strong fundamentals and stable demand for its products, General Dynamics may continue to reward shareholders with more impressive dividend hikes as well as share repurchase activity.
Peer Moves
Defense companies generally have long-term contracts with government entities which ensures stable income and cash flow. They tend to have a strong financial position, which allows them to reward shareholders with either share repurchase activity or dividend hikes. , Apart from General Dynamics, other defense players that have been engaged in shareholder-friendly moves are:
In February 2023, L3Harris Technologies (LHX - Free Report) approved a hike in its quarterly dividend to $1.14 per share, up 1.8% from the prior payout.
L3Harris boasts a long-term (three-five) earnings growth rate of 2.6%. The Zacks Consensus Estimate for LHX’s 2023 sales suggests a growth rate of 3.6% from the prior-year reported figure.
In Feb 2023, Northrop Grumman (NOC - Free Report) entered into an accelerated share repurchase (ASR) agreement with Bank of America, N.A. to repurchase $500 million of Northrop Grumman’s common stock.
NOC has a long-term earnings growth rate of 3.5%. Shares of Northrop have increased 3.4% in the past year.
In Sep 2022, Lockheed Martin Corporation (LMT - Free Report) )announced that its board of directors has authorized a fourth quarter 2022 dividend of $3.00 per share, rising 7.1% from the prior payout.
LMT’s long-term earnings growth rate is pegged at 6.9%. Lockheed Martin shares have risen 8.1% in the past year.
Price Movement
In the past year, shares of General Dynamics have dropped 3.6% compared with the industry’s fall of 10.7%.
Image: Bigstock
General Dynamics (GD) Announces a Hike of 4.8% in Dividend
General Dynamics Corporation (GD - Free Report) recently announced that its board of directors approved a hike in its quarterly dividend to $1.32 per share, up 4.8% from the prior payout.
With the current hike, the company will now pay out an annual dividend of $5.28 per share. This represents an annual dividend yield of 2.33% based on its share price worth as of Mar 8. The annualized dividend yield is higher than the Zacks S&P 500 composite’s yield of 1.59%.
This signifies General Dynamics’s strength in business to generate enough cash flow to reward shareholders with improved dividend payout
Will General Dynamics Sustain Dividend Hikes?
The increase in the dividend payout is backed by strength in the business, which enables the company to register growth in earnings and sales. Hence, it is imperative to mention that General Dynamics recorded a 5.6% increase in its earnings in the last reported quarter, while sales recorded a growth rate of 5.4% from the previous year’s reported figure. Such improvement in numbers must have triggered the hike in the dividend payout for shareholders.
Also, the ability to distribute excess cash to shareholders is underpinned by a company’s strategy and strong cash flow position. In this context, it is imperative to mention that the company recorded a growth of 7.2% in cash flow from operating activities, while its free cash flow registered an increase of 2.4% in 2022. Such enhancement in cash positions complements a company’s intent to increase dividends for shareholders.
General Dynamics’ backlog strength also plays a significant role in accomplishing the objectives of its business and supporting such dividend payouts. It recorded a total backlog of $91.10 billion in the fourth quarter of 2022, up 2.6% from third-quarter 2022’s backlog of $88.80 billion.
All the aforementioned factors collectively enabled the company to consistently increase dividends for its shareholders. The company paid a total dividend of $1.4 billion in 2022, compared with $1.3 billion in 2021 and $1.2 billion in 2020. General Dynamics’ has a long history of increasing annual dividends and has been doing the same for the last 26 years. The company repurchased 5.3 million of our outstanding shares for $1.2 billion in 2022 while it has 6.7 million remains in its authorization to be repurchased.
Courtesy of the strong fundamentals and stable demand for its products, General Dynamics may continue to reward shareholders with more impressive dividend hikes as well as share repurchase activity.
Peer Moves
Defense companies generally have long-term contracts with government entities which ensures stable income and cash flow. They tend to have a strong financial position, which allows them to reward shareholders with either share repurchase activity or dividend hikes. , Apart from General Dynamics, other defense players that have been engaged in shareholder-friendly moves are:
In February 2023, L3Harris Technologies (LHX - Free Report) approved a hike in its quarterly dividend to $1.14 per share, up 1.8% from the prior payout.
L3Harris boasts a long-term (three-five) earnings growth rate of 2.6%. The Zacks Consensus Estimate for LHX’s 2023 sales suggests a growth rate of 3.6% from the prior-year reported figure.
In Feb 2023, Northrop Grumman (NOC - Free Report) entered into an accelerated share repurchase (ASR) agreement with Bank of America, N.A. to repurchase $500 million of Northrop Grumman’s common stock.
NOC has a long-term earnings growth rate of 3.5%. Shares of Northrop have increased 3.4% in the past year.
In Sep 2022, Lockheed Martin Corporation (LMT - Free Report) )announced that its board of directors has authorized a fourth quarter 2022 dividend of $3.00 per share, rising 7.1% from the prior payout.
LMT’s long-term earnings growth rate is pegged at 6.9%. Lockheed Martin shares have risen 8.1% in the past year.
Price Movement
In the past year, shares of General Dynamics have dropped 3.6% compared with the industry’s fall of 10.7%.
Image Source: Zacks Investment Research
Zacks Rank
General Dynamics currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.