Only 2 Days Left To Cash In On General Dynamics Corporation (NYSE:GD) Dividend, Should You Buy?

Investors who want to cash in on General Dynamics Corporation's (NYSE:GD) upcoming dividend of US$0.93 per share have only 2 days left to buy the shares before its ex-dividend date, 05 July 2018, in time for dividends payable on the 10 August 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let's take a look at General Dynamics's most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for General Dynamics

5 questions I ask before picking a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is it paying an annual yield above 75% of dividend payers?
• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
• Has dividend per share risen in the past couple of years?
• Is its earnings sufficient to payout dividend at the current rate?
• Will it have the ability to keep paying its dividends going forward?

Does General Dynamics pass our checks?

The current trailing twelve-month payout ratio for the stock is 34.85%, which means that the dividend is covered by earnings. However, going forward, analysts expect GD's payout to fall to 30.90% of its earnings, which leads to a dividend yield of 2.15%. However, EPS should increase to $11.43, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

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. In the case of GD it has increased its DPS from $1.4 to $3.72 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.

Compared to its peers, General Dynamics has a yield of 2.00%, which is high for Aerospace & Defense stocks but still below the market's top dividend payers.

Next Steps:

Considering the dividend attributes we analyzed above, General Dynamics is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three essential aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for GD’s future growth? Take a look at our free research report of analyst consensus for GD’s outlook.
2. Valuation: What is GD worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether GD is currently mispriced by the market.
3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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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.