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3 Days Left Before General Dynamics Corporation (NYSE:GD) Will Start Trading Ex-Dividend, Should You Buy?
Investors who want to cash in on General Dynamics Corporation's (NYSE:GD) upcoming dividend of $0.84 per share have only 3 days left to buy the shares before its ex-dividend date, 18 January 2018, in time for dividends payable on the 09 February 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into General Dynamics's latest financial data to analyse its dividend attributes. See our latest analysis for General Dynamics
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
How well does General Dynamics fit our criteria?
The company currently pays out 30.44% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect GD's payout to increase to 33.53% of its earnings, which leads to a dividend yield of 1.78%. However, EPS is forecasted to fall to $10.64 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. GD has increased its DPS from $1.16 to $3.36 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes GD a true dividend rockstar. In terms of its peers, General Dynamics produces a yield of 1.60%, which is high for aerospace and defense stocks but still below the low risk savings rate.What this means for you:
Are you a shareholder? Investors of General Dynamics can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, General Dynamics is one worth keeping around in your income portfolio. But, depending on your current portfolio, it may be worth exploring other income stocks to increase diversification, or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking into account the dividend metrics, General Dynamics ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Whether or not you like General Dynamics as a dividend stock, it's still worth checking the price tag. Is General Dynamics overvalued or is it actually a bargain? Dig deeper in our latest free analysis to find out!
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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
About NYSE:GD
Very undervalued with flawless balance sheet and pays a dividend.