Critical Analysis: General Dynamics Corporation (GD) & Its Peers

General Dynamics Corporation (NYSE: GD) is one of 44 public companies in the “Aerospace & Defense” industry, but how does it contrast to its rivals? We will compare General Dynamics Corporation to related businesses based on the strength of its institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Dividends

General Dynamics Corporation pays an annual dividend of $3.36 per share and has a dividend yield of 1.6%. General Dynamics Corporation pays out 34.6% of its earnings in the form of a dividend. As a group, “Aerospace & Defense” companies pay a dividend yield of 1.5% and pay out 36.1% of their earnings in the form of a dividend. General Dynamics Corporation has increased its dividend for 19 consecutive years. General Dynamics Corporation is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

86.2% of General Dynamics Corporation shares are owned by institutional investors. Comparatively, 70.3% of shares of all “Aerospace & Defense” companies are owned by institutional investors. 6.7% of General Dynamics Corporation shares are owned by insiders. Comparatively, 7.1% of shares of all “Aerospace & Defense” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

General Dynamics Corporation has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, General Dynamics Corporation’s rivals have a beta of 1.06, indicating that their average stock price is 6% more volatile than the S&P 500.

Earnings & Valuation

This table compares General Dynamics Corporation and its rivals gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
General Dynamics Corporation $31.22 billion $4.89 billion 22.00
General Dynamics Corporation Competitors $8.56 billion $1.20 billion 81.73

General Dynamics Corporation has higher revenue and earnings than its rivals. General Dynamics Corporation is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares General Dynamics Corporation and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
General Dynamics Corporation 9.63% 28.17% 9.31%
General Dynamics Corporation Competitors -5.04% 24.59% 3.95%

Analyst Ratings

This is a breakdown of current recommendations and price targets for General Dynamics Corporation and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
General Dynamics Corporation 1 3 8 0 2.58
General Dynamics Corporation Competitors 472 2091 2316 82 2.40

General Dynamics Corporation presently has a consensus price target of $210.25, indicating a potential downside of 1.69%. As a group, “Aerospace & Defense” companies have a potential upside of 3.35%. Given General Dynamics Corporation’s rivals higher probable upside, analysts plainly believe General Dynamics Corporation has less favorable growth aspects than its rivals.

Summary

General Dynamics Corporation beats its rivals on 10 of the 15 factors compared.

About General Dynamics Corporation

General Dynamics Corporation is a global aerospace and defense company. The Company offers a portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; information technology (IT) services and C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) solutions, and shipbuilding and ship repair. It operates through four business groups: Aerospace, Combat Systems, Information Systems and Technology, and Marine Systems. Its Aerospace group offers aircraft design; cockpit and cabin systems, and product service and support. Its Combat Systems group offers combat vehicles, weapons systems and munitions. The Information Systems and Technology group provides technologies, products and services in support of various programs. The Marine Systems group is a designer and builder of nuclear-powered submarines, surface combatants and auxiliary and combat-logistics ships.

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