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General Dynamics (GD) Rewards Shareholders, Hikes Dividend
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General Dynamics Corporation’s (GD - Free Report) board of directors has approved a 5.9% hike in annual dividend. Consequently, this shipbuilder’s annualized payout will be now $5.04 per share compared with the prior level of $4.76.
The revised quarterly dividend of $1.26 per share will be paid out on May 6, 2022, to stockholders on record as of Apr 8.
Dividend Hike Details
The company boasts a longstanding history of increasing annual dividend in a systematic manner. The latest hike will mark the 25th consecutive annual dividend hike approved by General Dynamics’ board.
The current annualized dividend yield is 2.14%, based on its share price worth $235.75 as of Mar 2. Notably, the company’s dividend yield is better than the industry average of 1.38% and Zacks S&P 500 composite’s 1.36%.
Driving Factors Behind the Dividend Hike
General Dynamics is a major player in the Aerospace – Defense industry and maintains a flexible liquidity position owing to solid operational performance. It is owing to this stable financial position and systematic growth strategy that this defense contractor increases dividends regularly.
General Dynamics ended 2021 with solid cash and equivalents worth $1.60 billion. Also, the company’s free cash flow worth $3.38 billion at 2021-end increased a solid 17.1% annually. Moreover, the company reported cash provided by operating activities worth $4.3 billion during 2021 compared with $3.9 billion in 2020. Such an impressive cash balance position reflects financial strength, which must have enabled it to fund the latest dividend hike.
Can General Dynamics Maintain Dividend Hikes?
General Dynamics has been steadily witnessing strong order growth for combat-proven products, in line with its usual trend. This in turn enabled the company to record a backlog of $87.59 billion at the end of 2021. Notably, this backlog includes orders for the new G400 and G800 aircraft, which are scheduled to enter service in 2025 and 2023, respectively Such impressive backlog traits are expected to bolster its revenue generation prospects significantly.
Further, General Dynamics had no commercial paper outstanding and $5 billion in committed bank credit facilities for general corporate purposes and working capital needs as of Dec 31, 2021. This implies that its liquidity position is sufficient to maintain business operations smoothly. This, in turn, should enable the company to support its usual dividend hike program in the days ahead.
Dividend Payouts by Other Defense Players
Stable cash flow enables defense companies to reward shareholders with regular dividend hikes, thereby placing them in investors’ good books.
Similar to General Dynamics, another defense major, L3Harris Technologies (LHX - Free Report) raised the dividend rate in recent times. In February 2022, L3Harris announced a solid 10% hike in dividend payout. Post this hike, the company’s annual dividend rate is now $4.48.
LHX boasts a solid long-term earnings growth rate of 4.4%, which should help the stock to continue with its dividend hike strategy. Meanwhile, the Zacks Consensus Estimate for the company’s 2022 earnings indicates an improvement of 4.9% from 2020 reported earnings.
In September 2021, Lockheed Martin (LMT - Free Report) increased its dividend by 7.7%. Post this hike, the company’s annual dividend rate is now $11.20.
LMT boasts a solid long-term earnings growth rate of 3.6%, which should help the stock to continue with its dividend hike strategy. Meanwhile, the Zacks Consensus Estimate for the stock’s 2022 earnings implies an improvement of 18.4% from 2020 reported earnings.
In May 2021, Northrop Grumman Corporation's (NOC - Free Report) board of directors approved an 8.3% hike in quarterly common stock dividend. Post this hike, the company’s annual dividend rate is now $6.28.
NOC boasts a solid long-term earnings growth rate of 6.2%, which should help the stock to continue with its dividend hike strategy. The Zacks Consensus Estimate for the stock’s 2022 sales implies an improvement of 2.6% from 2020 reported earnings.
Image: Bigstock
General Dynamics (GD) Rewards Shareholders, Hikes Dividend
General Dynamics Corporation’s (GD - Free Report) board of directors has approved a 5.9% hike in annual dividend. Consequently, this shipbuilder’s annualized payout will be now $5.04 per share compared with the prior level of $4.76.
The revised quarterly dividend of $1.26 per share will be paid out on May 6, 2022, to stockholders on record as of Apr 8.
Dividend Hike Details
The company boasts a longstanding history of increasing annual dividend in a systematic manner. The latest hike will mark the 25th consecutive annual dividend hike approved by General Dynamics’ board.
The current annualized dividend yield is 2.14%, based on its share price worth $235.75 as of Mar 2. Notably, the company’s dividend yield is better than the industry average of 1.38% and Zacks S&P 500 composite’s 1.36%.
Driving Factors Behind the Dividend Hike
General Dynamics is a major player in the Aerospace – Defense industry and maintains a flexible liquidity position owing to solid operational performance. It is owing to this stable financial position and systematic growth strategy that this defense contractor increases dividends regularly.
General Dynamics ended 2021 with solid cash and equivalents worth $1.60 billion. Also, the company’s free cash flow worth $3.38 billion at 2021-end increased a solid 17.1% annually. Moreover, the company reported cash provided by operating activities worth $4.3 billion during 2021 compared with $3.9 billion in 2020. Such an impressive cash balance position reflects financial strength, which must have enabled it to fund the latest dividend hike.
Can General Dynamics Maintain Dividend Hikes?
General Dynamics has been steadily witnessing strong order growth for combat-proven products, in line with its usual trend. This in turn enabled the company to record a backlog of $87.59 billion at the end of 2021. Notably, this backlog includes orders for the new G400 and G800 aircraft, which are scheduled to enter service in 2025 and 2023, respectively Such impressive backlog traits are expected to bolster its revenue generation prospects significantly.
Further, General Dynamics had no commercial paper outstanding and $5 billion in committed bank credit facilities for general corporate purposes and working capital needs as of Dec 31, 2021. This implies that its liquidity position is sufficient to maintain business operations smoothly. This, in turn, should enable the company to support its usual dividend hike program in the days ahead.
Dividend Payouts by Other Defense Players
Stable cash flow enables defense companies to reward shareholders with regular dividend hikes, thereby placing them in investors’ good books.
Similar to General Dynamics, another defense major, L3Harris Technologies (LHX - Free Report) raised the dividend rate in recent times. In February 2022, L3Harris announced a solid 10% hike in dividend payout. Post this hike, the company’s annual dividend rate is now $4.48.
LHX boasts a solid long-term earnings growth rate of 4.4%, which should help the stock to continue with its dividend hike strategy. Meanwhile, the Zacks Consensus Estimate for the company’s 2022 earnings indicates an improvement of 4.9% from 2020 reported earnings.
In September 2021, Lockheed Martin (LMT - Free Report) increased its dividend by 7.7%. Post this hike, the company’s annual dividend rate is now $11.20.
LMT boasts a solid long-term earnings growth rate of 3.6%, which should help the stock to continue with its dividend hike strategy. Meanwhile, the Zacks Consensus Estimate for the stock’s 2022 earnings implies an improvement of 18.4% from 2020 reported earnings.
In May 2021, Northrop Grumman Corporation's (NOC - Free Report) board of directors approved an 8.3% hike in quarterly common stock dividend. Post this hike, the company’s annual dividend rate is now $6.28.
NOC boasts a solid long-term earnings growth rate of 6.2%, which should help the stock to continue with its dividend hike strategy. The Zacks Consensus Estimate for the stock’s 2022 sales implies an improvement of 2.6% from 2020 reported earnings.
Zacks Rank & Price Movement
General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Shares of General Dynamics have gained 42.3% in the past 12 months against the industry’s 26.8% decline.
Image Source: Zacks Investment Research