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Reasons to Add General Dynamics (GD) to Your Portfolio Now
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General Dynamics (GD - Free Report) , with a strong backlog and rising earnings estimates, offers a great investment opportunity in the Aerospace Defense sector.
Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock a promising investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for GD’s 2024 earnings per share (EPS) has increased 0.67% to $14.92 in the past 60 days. The Zacks Consensus Estimate for GD’s total revenues for 2024 stands at $45.67billion, indicating year-over-year growth of 6.24%.
The company’s (three to five years) earnings growth is pegged at 8.96%. It delivered an average earnings surprise of 3.68% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, General Dynamics’s ROE is 17.13% compared to its industry average of 10.51%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Dividend History
GD has been increasing shareholders’ value through dividend payments. In December 2023, GD announced a quarterly dividend of $1.32 per share and an annual dividend of $5.28 per share. General Dynamics’ current dividend yield is 2.03%, better than the Zacks S&P 500 composite’s yield of 1.11%.
Strong Backlog
At the end of the third quarter of 2023, General Dynamics witnessed a backlog of $95.56 billion, driven by a strong order inflow. The strength of the order flow was driven by rising demand across the company’s product and services portfolio, including orders for all models of Gulfstream aircraft.
Such strong backlog trends indicate solid demand for the company’s quality products, thereby bolstering its revenue generation prospects significantly. Apart from its well-established domestic market trends, General Dynamics enjoys a significant overseas opportunity with order potential from Poland, the Czech Republic, Romania, Denmark, Germany and Switzerland.
Solvency
General Dynamics’s times interest earned ratio (TIE) at the end of the third quarter of 2023 was 12.3. The strong TIE ratio indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
Price Performance
In the past six months, GD shares have risen 19.8% compared with its industry’s average return of 3.3%.
VirTra’s long-term earnings growth rate is pegged at 30%. The Zacks Consensus Estimate for the company’s 2024 EPS is pegged at 70 cents, implying a year-over-year increase of 9.38%.
AeroVironment delivered an average earnings surprise of 47.23% in the last four quarters. The Zacks Consensus Estimate for the company’s fiscal 2024 EPS stands at $2.76, calling for a year-over-year increase of 119.05%
Safran’s long-term earnings growth rate is pegged at 34.34%. The Zacks Consensus Estimate for the company’s 2024 EPS is pegged at $1.81, indicating a year-over-year rise of 154.93%.
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Reasons to Add General Dynamics (GD) to Your Portfolio Now
General Dynamics (GD - Free Report) , with a strong backlog and rising earnings estimates, offers a great investment opportunity in the Aerospace Defense sector.
Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock a promising investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for GD’s 2024 earnings per share (EPS) has increased 0.67% to $14.92 in the past 60 days. The Zacks Consensus Estimate for GD’s total revenues for 2024 stands at $45.67billion, indicating year-over-year growth of 6.24%.
The company’s (three to five years) earnings growth is pegged at 8.96%. It delivered an average earnings surprise of 3.68% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, General Dynamics’s ROE is 17.13% compared to its industry average of 10.51%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Dividend History
GD has been increasing shareholders’ value through dividend payments. In December 2023, GD announced a quarterly dividend of $1.32 per share and an annual dividend of $5.28 per share. General Dynamics’ current dividend yield is 2.03%, better than the Zacks S&P 500 composite’s yield of 1.11%.
Strong Backlog
At the end of the third quarter of 2023, General Dynamics witnessed a backlog of $95.56 billion, driven by a strong order inflow. The strength of the order flow was driven by rising demand across the company’s product and services portfolio, including orders for all models of Gulfstream aircraft.
Such strong backlog trends indicate solid demand for the company’s quality products, thereby bolstering its revenue generation prospects significantly. Apart from its well-established domestic market trends, General Dynamics enjoys a significant overseas opportunity with order potential from Poland, the Czech Republic, Romania, Denmark, Germany and Switzerland.
Solvency
General Dynamics’s times interest earned ratio (TIE) at the end of the third quarter of 2023 was 12.3. The strong TIE ratio indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
Price Performance
In the past six months, GD shares have risen 19.8% compared with its industry’s average return of 3.3%.
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Other Stocks to Consider
A few other top-ranked stocks from the same sector are VirTra (VTSI - Free Report) , which sports a Zacks Rank #1 (Strong Buy), and AeroVironment (AVAV - Free Report) and Safran (SAFRY - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
VirTra’s long-term earnings growth rate is pegged at 30%. The Zacks Consensus Estimate for the company’s 2024 EPS is pegged at 70 cents, implying a year-over-year increase of 9.38%.
AeroVironment delivered an average earnings surprise of 47.23% in the last four quarters. The Zacks Consensus Estimate for the company’s fiscal 2024 EPS stands at $2.76, calling for a year-over-year increase of 119.05%
Safran’s long-term earnings growth rate is pegged at 34.34%. The Zacks Consensus Estimate for the company’s 2024 EPS is pegged at $1.81, indicating a year-over-year rise of 154.93%.