General Dynamics (GD)
By J. Royden Ward, Editor of Cabot Benjamin Graham Value Letter
From Cabot Wealth Advisory 10/21/10 Sign up for free Cabot Wealth Advisory e-newsletter
General Dynamics (GD) makes electronics for land, sea and air weapons systems. GD manufactures cargo ships and Gulfstream business jets. It also makes armored combat vehicles, submarines and destroyers. The company sells primarily to the U.S. Department of Defense including the U.S. Army and Navy.
General Dynamic’s sales, earnings and dividends increased 10% to 12% per year during the past 10 years. We expect sales and earnings to increase at an 8% clip during the next five years, but the company will likely increase dividends by 12% per year. Sales to the military will probably slow, but sales generated from General Dynamic’s other units, including Gulfstream, will likely pick up steam.
GD shares are undervalued at 8.9 times 12-month forward EPS. Dividends have been paid since 1979 and currently provide a yield of 2.7%.
J. Royden Ward
Editor of Cabot Benjamin Graham Value Letter
A lifelong investment professional, J. Royden Ward applies his 40 years of investment research, portfolio management, writing and publishing experience to his role as analyst and editor of Cabot Benjamin Graham Value Letter, which is directed to long-term investors seeking a guide to profitable value investing based on the time-tested systems originally developed by Benjamin Graham, the Father of Value Investing. A second-generation disciple of Benjamin Graham, Roy in 1969 pioneered the development of a computerized model that applied the formulas developed by Graham using a unique ranking system. Today, Roy applies his system to two models in the Value Letter.
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|General Dynamics (GD)
2941 Fairview Park Drive, Suite 100
Falls Church, Virginia 22042-4153
|Index Membership: S&P 100, S&P 500, S&P 1500 Super Comp |
Sector: Industrial Goods
Industry: Aerospace/Defense Products & Services
Full Time Employees: 91,700