NYSE:GD

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

General Dynamics Corporation operates as an aerospace and defense company worldwide.


Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has General Dynamics's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GD has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.8%

GD

-4.9%

US Aerospace & Defense

-0.7%

US Market


1 Year Return

-23.4%

GD

-30.7%

US Aerospace & Defense

5.3%

US Market

Return vs Industry: GD exceeded the US Aerospace & Defense industry which returned -31.1% over the past year.

Return vs Market: GD underperformed the US Market which returned 6.7% over the past year.


Shareholder returns

GDIndustryMarket
7 Day-3.8%-4.9%-0.7%
30 Day-4.3%-8.5%4.6%
90 Day3.1%-7.0%14.0%
1 Year-21.3%-23.4%-16.9%-30.7%7.6%5.3%
3 Year-23.8%-28.6%4.4%-17.8%34.9%26.1%
5 Year6.5%-4.2%40.2%3.6%62.3%44.7%

Price Volatility Vs. Market

How volatile is General Dynamics's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is General Dynamics undervalued compared to its fair value and its price relative to the market?

35.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GD ($142.82) is trading below our estimate of fair value ($222.9)

Significantly Below Fair Value: GD is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GD is good value based on its PE Ratio (12x) compared to the US Aerospace & Defense industry average (14.8x).

PE vs Market: GD is good value based on its PE Ratio (12x) compared to the US market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: GD is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: GD is overvalued based on its PB Ratio (3.1x) compared to the US Aerospace & Defense industry average (2.1x).


Next Steps

Future Growth

How is General Dynamics forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GD's forecast earnings growth (7.6% per year) is above the savings rate (2.2%).

Earnings vs Market: GD's earnings (7.6% per year) are forecast to grow slower than the US market (22.9% per year).

High Growth Earnings: GD's earnings are forecast to grow, but not significantly.

Revenue vs Market: GD's revenue (4.4% per year) is forecast to grow slower than the US market (9.4% per year).

High Growth Revenue: GD's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GD's Return on Equity is forecast to be high in 3 years time (22.5%)


Next Steps

Past Performance

How has General Dynamics performed over the past 5 years?

4.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GD has high quality earnings.

Growing Profit Margin: GD's current net profit margins (8.9%) are higher than last year (8.7%).


Past Earnings Growth Analysis

Earnings Trend: GD's earnings have grown by 4.2% per year over the past 5 years.

Accelerating Growth: GD's earnings growth over the past year (4.2%) exceeds its 5-year average (4.2% per year).

Earnings vs Industry: GD earnings growth over the past year (4.2%) underperformed the Aerospace & Defense industry 4.2%.


Return on Equity

High ROE: Whilst GD's Return on Equity (26.1%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is General Dynamics's financial position?


Financial Position Analysis

Short Term Liabilities: GD's short term assets ($24.7B) exceed its short term liabilities ($18.4B).

Long Term Liabilities: GD's short term assets ($24.7B) exceed its long term liabilities ($22.1B).


Debt to Equity History and Analysis

Debt Level: GD's debt to equity ratio (136.3%) is considered high.

Reducing Debt: GD's debt to equity ratio has increased from 29.8% to 136.3% over the past 5 years.

Debt Coverage: GD's debt is not well covered by operating cash flow (16.9%).

Interest Coverage: GD's interest payments on its debt are well covered by EBIT (10.3x coverage).


Balance Sheet


Next Steps

Dividend

What is General Dynamics's current dividend yield, its reliability and sustainability?

3.08%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: GD's dividend (3.08%) is higher than the bottom 25% of dividend payers in the US market (1.68%).

High Dividend: GD's dividend (3.08%) is low compared to the top 25% of dividend payers in the US market (4.6%).


Stability and Growth of Payments

Stable Dividend: GD's dividends per share have been stable in the past 10 years.

Growing Dividend: GD's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.8%), GD's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GD's dividends in 3 years are forecast to be well covered by earnings (34.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure


CEO

Phebe Novakovic (62yo)

7.5yrs

Tenure

US$18,313,204

Compensation

Ms. Phebe N. Novakovic has been the Chairman and Chief Executive Officer of General Dynamics Corporation since January 1, 2013 and has been its Director since May 2012. Ms. Novakovic served as the Presiden ...


CEO Compensation Analysis

Compensation vs Market: Phebe's total compensation ($USD18.31M) is above average for companies of similar size in the US market ($USD11.50M).

Compensation vs Earnings: Phebe's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Phebe Novakovic
CEO & Chairman7.5yrsUS$18.31m0.25% $104.2m
Jason Aiken
Senior VP & CFO6.5yrsUS$5.12m0.032% $12.9m
Gregory Gallopoulos
Senior VP10.5yrsUS$4.21m0.045% $18.4m
Mark Roualet
Executive Vice President of Combat Systems7.33yrsUS$5.31m0.046% $18.6m
Mark Burns
VP & President of Gulfstream Aerospace5yrsUS$4.37m0.016% $6.3m
Kimberly Kuryea
Senior Vice President of Human Resources & Administration3.25yrsno data0.023% $9.2m
Howard Rubel
Vice President of Investor Relationsno datano datano data
Thomas Kirchmaier
Senior Vice President of Planning1.25yrsno datano data
Christopher Marzilli
Executive VP of Information Technology & Mission Systems Segments1.5yrsno data0.025% $10.2m
Marguerite Gilliland
Senior Vice President5.25yrsno data0.013% $5.2m
Robert Smith
Executive Vice President of Marine Systems1yrno data0.011% $4.7m
Kevin Graney
President of General Dynamics Electric Boat3.5yrsno data0.0076% $3.1m

5.0yrs

Average Tenure

60yo

Average Age

Experienced Management: GD's management team is seasoned and experienced (5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Phebe Novakovic
CEO & Chairman7.5yrsUS$18.31m0.25% $104.2m
William Osborn
Independent Director10.58yrsUS$314.93k0.013% $5.2m
James Crown
Lead Independent Director10.17yrsUS$337.89k5.43% $2.2b
John Stratton
Independent Director0.42yrno data0.0013% $539.6k
Rudy deLeon
Independent Director5.83yrsUS$306.89k0.0013% $523.2k
Laura Schumacher
Independent Director6.42yrsUS$286.89k0.0021% $846.1k
Catherine Reynolds
Independent Director3.17yrsUS$314.89k0.0012% $506.9k
C. Nye
Independent Director2.17yrsUS$286.89k0.00080% $327.0k
Mark Malcolm
Independent Director4.92yrsUS$304.89k0.0022% $887.0k
James Mattis
Independent Director0.92yrUS$127.46k0.00023% $94.0k
Peter Wall
Independent Director3.92yrsUS$314.89k0.00084% $343.4k
Cecil Haney
Independent Director1.33yrsUS$266.36k0.00035% $143.1k

4.4yrs

Average Tenure

64yo

Average Age

Experienced Board: GD's board of directors are considered experienced (4.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

General Dynamics Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: General Dynamics Corporation
  • Ticker: GD
  • Exchange: NYSE
  • Founded: 1899
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$40.876b
  • Shares outstanding: 286.21m
  • Website: https://www.gd.com

Number of Employees


Location

  • General Dynamics Corporation
  • 11011 Sunset Hills Road
  • Reston
  • Virginia
  • 20190
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GDNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
GDXDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
GDXXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
GD *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
0IUCLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
GEDYWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
GDXETLX (Eurotlx)YesCommon StockITEURJan 1968
GDBR34BOVESPA (Bolsa de Valores de Sao Paulo)EACH BDR REPR 1 COM STK USD1BRBRLAug 2015

Biography

General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through five segments: Aerospace, Combat Systems, Information Technology, Mission Systems, and Marine Systems. The Aerospace segment designs, manufactures, and supports business-jet aircraft; and offers business-aviation services, including maintenance, fixed-base operation, government fleet, aircraft management, charter, and staffing services. The Combat Systems segment engages in the design, development, production, modernization, and sustainment of combat vehicles, weapons systems, and munitions. This segment offers wheeled combat and tactical vehicles; main battle tanks and tracked combat vehicles; weapons systems, armaments, and munitions; and maintenance, logistics support, and sustainment services. The Information Technology segment provides information technology (IT), IT infrastructure modernization, and professional services, as well as cloud, cyber, software development, systems engineering, and data analytics services and solutions. The Mission Systems segment offers mission-critical C4ISR products and systems, such as space, intelligence, and cyber systems; ground systems and products; and naval, air, and electronic systems. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary and combat-logistics ships for the United States Navy and Jones Act ships for commercial customers. This segment provides nuclear-powered submarines; surface combatants; auxiliary and combat-logistics ships; commercial product carriers and containerships; design and engineering support services; and maintenance, modernization, and lifecycle support services, as well as repair services for navy ships. The company was founded in 1899 and is headquartered in Reston, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/13 23:51
End of Day Share Price2020/07/13 00:00
Earnings2020/03/29
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.