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Valued at a market cap of $71.1 billion, General Dynamics Corporation (GD) is an aerospace and defense company specializing in high-end design, engineering, and manufacturing to deliver state-of-the-art solutions to customers. The Reston, Virginia-based company offers a broad portfolio of products and services in business aviation, ship construction, and repair, land combat vehicles, weapons systems and munitions, and technology products and services.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and General Dynamics fits the label perfectly, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the aerospace & defense industry. The company’s strengths lie in its diverse defense portfolio, sustained government contracts, and strong foothold in both military and commercial sectors. It benefits from advanced R&D capabilities, a solid backlog of defense orders, and strategic partnerships with the U.S. Department of Defense and allied nations.
This aerospace and defense giant has slipped 17% from its 52-week high of $316.90, achieved on Nov. 13, 2024. It has declined 4.4% over the past three months, outpacing the Industrial Select Sector SPDR Fund’s (XLI) 5% downtick over the same time frame.
However, in the longer term, GD has declined 3.9% over the past 52 weeks, underperforming XLI’s 10.7% return. Moreover, on a YTD basis, shares of GD are marginally down, compared to XLI’s 1.6% rise over the same time frame.
To confirm its recent bullish trend, GD has recently moved above its 50-day moving average. However, it has remained below its 200-day moving average since mid-November, 2024.
On Mar. 5, GD’s shares climbed 4.9% as investors expected a dividend increase, which were met by GD. Later that afternoon, the company marked its 28th consecutive year of dividend growth by announcing a 5.6% hike in its quarterly dividend to $1.50 per share, up from $1.42 per share payout in the previous quarter.
On Jan. 29, GD reported strong Q4 earnings results, surpassing expectations with net income of $4.15 per share and revenue of $13.3 billion. The top line grew 14.3% year-over-year, while net income rose 14%. However, despite this solid performance, GD’s stock dropped 4.2% on the same day, as investors remained unimpressed. While the company saw growth across all business segments, weaker-than-expected results in some of its key units dampened market sentiment.
GD has considerably outpaced its rival, The Boeing Company (BA) which declined 18.9% over the past 52 weeks and 7.8% on a YTD basis.
Looking at GD’s recent outperformance relative to its broader sector, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 22 analysts covering it, and the mean price target of $294.20 suggests a modest 11.9% premium to its current levels.
