GENERAL DYNAMICS CORP (GD) Stock Fundamental Analysis
NYSE:GD - New York Stock Exchange, Inc. - US3695501086 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to GD. GD was compared to 64 industry peers in the Aerospace & Defense industry. GD has an average financial health and profitability rating. GD has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year GD was profitable.
GD had a positive operating cash flow in the past year.
GD had positive earnings in each of the past 5 years.
GD had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GD has a better Return On Assets (6.77%) than 73.44% of its industry peers.
The Return On Equity of GD (17.14%) is better than 87.50% of its industry peers.
GD's Return On Invested Capital of 10.49% is amongst the best of the industry. GD outperforms 85.94% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GD is above the industry average of 7.79%.
The 3 year average ROIC (9.79%) for GD is below the current ROIC(10.49%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.77% | ||
| ROE | 17.14% | ||
| ROIC | 10.49% |
ROA(3y)6.46%
ROA(5y)6.41%
ROE(3y)16.99%
ROE(5y)17.93%
ROIC(3y)9.79%
ROIC(5y)9.74%
1.3 Margins
GD has a better Profit Margin (7.93%) than 75.00% of its industry peers.
In the last couple of years the Profit Margin of GD has declined.
GD's Operating Margin of 10.05% is fine compared to the rest of the industry. GD outperforms 68.75% of its industry peers.
GD's Operating Margin has declined in the last couple of years.
GD's Gross Margin of 15.43% is on the low side compared to the rest of the industry. GD is outperformed by 75.00% of its industry peers.
In the last couple of years the Gross Margin of GD has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.05% | ||
| PM (TTM) | 7.93% | ||
| GM | 15.43% |
OM growth 3Y-2.43%
OM growth 5Y-3.18%
PM growth 3Y-2.17%
PM growth 5Y-2.19%
GM growth 3Y-2.51%
GM growth 5Y-2.96%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), GD is creating some value.
The number of shares outstanding for GD has been reduced compared to 1 year ago.
GD has less shares outstanding than it did 5 years ago.
The debt/assets ratio for GD has been reduced compared to a year ago.
2.2 Solvency
GD has an Altman-Z score of 3.63. This indicates that GD is financially healthy and has little risk of bankruptcy at the moment.
GD has a Altman-Z score (3.63) which is comparable to the rest of the industry.
GD has a debt to FCF ratio of 2.91. This is a good value and a sign of high solvency as GD would need 2.91 years to pay back of all of its debts.
GD has a Debt to FCF ratio of 2.91. This is amongst the best in the industry. GD outperforms 90.63% of its industry peers.
GD has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of GD (0.35) is better than 60.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 2.91 | ||
| Altman-Z | 3.63 |
ROIC/WACC1.1
WACC9.51%
2.3 Liquidity
GD has a Current Ratio of 1.37. This is a normal value and indicates that GD is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.37, GD is not doing good in the industry: 71.88% of the companies in the same industry are doing better.
A Quick Ratio of 0.82 indicates that GD may have some problems paying its short term obligations.
With a Quick ratio value of 0.82, GD is not doing good in the industry: 76.56% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.37 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.48% over the past year.
Measured over the past 5 years, GD shows a small growth in Earnings Per Share. The EPS has been growing by 2.63% on average per year.
GD shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.88%.
The Revenue has been growing slightly by 3.93% on average over the past years.
EPS 1Y (TTM)13.48%
EPS 3Y5.7%
EPS 5Y2.63%
EPS Q2Q%14.01%
Revenue 1Y (TTM)12.88%
Revenue growth 3Y7.44%
Revenue growth 5Y3.93%
Sales Q2Q%14.31%
3.2 Future
Based on estimates for the next years, GD will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.73% on average per year.
GD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.31% yearly.
EPS Next Y12.07%
EPS Next 2Y12.48%
EPS Next 3Y11.22%
EPS Next 5Y9.73%
Revenue Next Year6.38%
Revenue Next 2Y5.39%
Revenue Next 3Y4.5%
Revenue Next 5Y4.31%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.24 indicates a rather expensive valuation of GD.
Based on the Price/Earnings ratio, GD is valued cheaper than 81.25% of the companies in the same industry.
GD is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
GD is valuated rather expensively with a Price/Forward Earnings ratio of 18.06.
GD's Price/Forward Earnings ratio is rather cheap when compared to the industry. GD is cheaper than 85.94% of the companies in the same industry.
GD's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.24 | ||
| Fwd PE | 18.06 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GD is valued a bit cheaper than the industry average as 76.56% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GD indicates a rather cheap valuation: GD is cheaper than 89.06% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.23 | ||
| EV/EBITDA | 14.38 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of GD may justify a higher PE ratio.
PEG (NY)1.68
PEG (5Y)7.7
EPS Next 2Y12.48%
EPS Next 3Y11.22%
5. Dividend
5.1 Amount
GD has a Yearly Dividend Yield of 2.17%. Purely for dividend investing, there may be better candidates out there.
GD's Dividend Yield is rather good when compared to the industry average which is at 1.39. GD pays more dividend than 92.19% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.52, GD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
5.2 History
On average, the dividend of GD grows each year by 7.16%, which is quite nice.
GD has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of GD decreased in the last 3 years.
Dividend Growth(5Y)7.16%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
40.43% of the earnings are spent on dividend by GD. This is a bit on the high side, but may be sustainable.
The dividend of GD is growing, but earnings are growing more, so the dividend growth is sustainable.
DP40.43%
EPS Next 2Y12.48%
EPS Next 3Y11.22%
276.08
-0.55 (-0.2%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners76.76%
Inst Owner Change0.01%
Ins Owners0.25%
Ins Owner Change1.74%
Market Cap74.09B
Analysts75.76
Price Target295.62 (7.08%)
Short Float %1.14%
Short Ratio1.76
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
Yearly Dividend5.62
Dividend Growth(5Y)7.16%
DP40.43%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.46%
Min EPS beat(2)-6.39%
Max EPS beat(2)-0.53%
EPS beat(4)0
Avg EPS beat(4)-3.68%
Min EPS beat(4)-6.39%
Max EPS beat(4)-0.53%
EPS beat(8)2
Avg EPS beat(8)-2.02%
EPS beat(12)4
Avg EPS beat(12)-1.55%
EPS beat(16)6
Avg EPS beat(16)-1.05%
Revenue beat(2)1
Avg Revenue beat(2)-0.63%
Min Revenue beat(2)-2.66%
Max Revenue beat(2)1.41%
Revenue beat(4)3
Avg Revenue beat(4)0.34%
Min Revenue beat(4)-2.66%
Max Revenue beat(4)1.65%
Revenue beat(8)6
Avg Revenue beat(8)1.27%
Revenue beat(12)7
Avg Revenue beat(12)0.2%
Revenue beat(16)8
Avg Revenue beat(16)-0.67%
PT rev (1m)0.33%
PT rev (3m)-8.86%
EPS NQ rev (1m)1.02%
EPS NQ rev (3m)1.41%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)-7.36%
Revenue NQ rev (1m)0.32%
Revenue NQ rev (3m)2.45%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.24 | ||
| Fwd PE | 18.06 | ||
| P/S | 1.55 | ||
| P/FCF | 23.23 | ||
| P/OCF | 18.05 | ||
| P/B | 3.36 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.38 |
EPS(TTM)13.64
EY4.94%
EPS(NY)15.29
Fwd EY5.54%
FCF(TTM)11.89
FCFY4.31%
OCF(TTM)15.3
OCFY5.54%
SpS177.79
BVpS82.21
TBVpS-0.05
PEG (NY)1.68
PEG (5Y)7.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.77% | ||
| ROE | 17.14% | ||
| ROCE | 12.6% | ||
| ROIC | 10.49% | ||
| ROICexc | 10.98% | ||
| ROICexgc | 27.96% | ||
| OM | 10.05% | ||
| PM (TTM) | 7.93% | ||
| GM | 15.43% | ||
| FCFM | 6.69% |
ROA(3y)6.46%
ROA(5y)6.41%
ROE(3y)16.99%
ROE(5y)17.93%
ROIC(3y)9.79%
ROIC(5y)9.74%
ROICexc(3y)10.23%
ROICexc(5y)10.26%
ROICexgc(3y)26.7%
ROICexgc(5y)28.25%
ROCE(3y)11.76%
ROCE(5y)11.7%
ROICexcg growth 3Y0.05%
ROICexcg growth 5Y-6.95%
ROICexc growth 3Y3.01%
ROICexc growth 5Y-2.13%
OM growth 3Y-2.43%
OM growth 5Y-3.18%
PM growth 3Y-2.17%
PM growth 5Y-2.19%
GM growth 3Y-2.51%
GM growth 5Y-2.96%
F-Score7
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 2.91 | ||
| Debt/EBITDA | 1.36 | ||
| Cap/Depr | 103.39% | ||
| Cap/Sales | 1.92% | ||
| Interest Coverage | 12.46 | ||
| Cash Conversion | 72.26% | ||
| Profit Quality | 84.35% | ||
| Current Ratio | 1.37 | ||
| Quick Ratio | 0.82 | ||
| Altman-Z | 3.63 |
F-Score7
WACC9.51%
ROIC/WACC1.1
Cap/Depr(3y)111.39%
Cap/Depr(5y)108.79%
Cap/Sales(3y)2.3%
Cap/Sales(5y)2.35%
Profit Quality(3y)100.61%
Profit Quality(5y)98.91%
High Growth Momentum
Growth
EPS 1Y (TTM)13.48%
EPS 3Y5.7%
EPS 5Y2.63%
EPS Q2Q%14.01%
EPS Next Y12.07%
EPS Next 2Y12.48%
EPS Next 3Y11.22%
EPS Next 5Y9.73%
Revenue 1Y (TTM)12.88%
Revenue growth 3Y7.44%
Revenue growth 5Y3.93%
Sales Q2Q%14.31%
Revenue Next Year6.38%
Revenue Next 2Y5.39%
Revenue Next 3Y4.5%
Revenue Next 5Y4.31%
EBIT growth 1Y12.98%
EBIT growth 3Y4.83%
EBIT growth 5Y0.63%
EBIT Next Year26.98%
EBIT Next 3Y13.38%
EBIT Next 5Y10.29%
FCF growth 1Y-16.1%
FCF growth 3Y-1.75%
FCF growth 5Y10.42%
OCF growth 1Y-12.75%
OCF growth 3Y-1.15%
OCF growth 5Y6.98%