July 12, 2026 a 07:46 am

GD: Dividend Analysis - General Dynamics Corporation

Overview

General Dynamics operates within the defense and aerospace sector, showing a solid history of dividend distribution without any recent interruptions. The company provides investors with a dividend yield of 1.65%, with the current dividend per share standing at $5.90. General Dynamics has sustained 49 years of consecutive dividend payments, a testament to its financial resilience and shareholder return focus.

Metric	Value
Sector	Defense and Aerospace
Dividend Yield	1.65%
Current Dividend per Share	$5.90
Dividend History	49 years
Last Cut or Suspension	None

Dividend History

Having a robust dividend history is crucial as it reflects a company's long-term commitment to returning value to its shareholders. General Dynamics has consistently increased its dividends, showcasing a commitment to rewarding its investors. The company's uninterrupted dividend track record for nearly five decades is an indicator of its stability and the management's fiscal discipline.

Year	Dividend per Share (USD)
2026	4.68
2025	5.92
2024	5.58
2023	5.22
2022	4.97

Dividend Growth

The dividend growth rates over 3 and 5 years serve as indicators of a company’s policy and ability to increase shareholder returns sustainably. For General Dynamics, the dividend growth over the last 3 years is approximately 6.00%, and the 5-year growth stands at about 6.50%. This reflects a slow yet steady approach to growing dividends, marking a balance between rewarding shareholders and reinvesting for business growth.

Time	Growth
3 years	6.00%
5 years	6.50%

The average dividend growth is 6.50% over 5 years. This shows moderate but steady dividend growth.

Payout Ratio

Understanding payout ratios is vital to gauge whether a company can sustain or increase dividends in the future. General Dynamics' EPS-based payout ratio is 36.74%, which indicates a safe level that balances between returning profits to shareholders and retaining earnings for future growth. Its FCF-based payout is even lower at 25.74%, affirming strong cash flow coverage for dividend payments.

Key Figure	Ratio
EPS-based	36.74%
Free Cash Flow-based	25.74%

The low payout ratios signal financial prudence, ensuring ample room for future dividend hikes without jeopardizing the company's financial health.

Cashflow & Capital Efficiency

Analyzing cash flow and capital efficiency is essential for assessing a company’s ability to generate and manage its capital. General Dynamics demonstrates a stable operational cash flow management and prudent capital expenditures. These facets help in maintaining its competitive positioning while offering reliable returns to its shareholders.

Metric	2025	2024	2023
Free Cash Flow Yield	4.36%	4.37%	5.37%
Earnings Yield	4.63%	5.17%	4.67%
CAPEX to Operating Cash Flow	22.68%	22.28%	19.19%
Stock-based Compensation to Revenue	0.37%	0.38%	0.43%
Free Cash Flow / Operating Cash Flow Ratio	77.32%	77.72%	80.81%

The steady cash flow ratios and balanced capital allocation highlight the company’s efficient financial management and its capacity to maintain growth and dividend distributions.

Balance Sheet & Leverage Analysis

Assessing the balance sheet gives insights into a company’s financial stability and leverage. General Dynamics maintains healthy leverage ratios, indicating controlled usage of debt to finance its operations, which ensures investor confidence in its balance sheet strength.

Metric	2025	2024	2023
Debt-to-Equity	38.21%	48.39%	52.04%
Debt-to-Assets	17.10%	19.11%	20.22%
Debt-to-Capital	27.64%	32.61%	34.23%
Net Debt to EBITDA	1.22	1.54	1.75
Current Ratio	1.44	1.37	1.44
Quick Ratio	0.89	0.82	0.92
Financial Leverage	2.23	2.53	2.57

The leverage metrics indicate that General Dynamics is adept at managing its liabilities, allowing for funding flexibility while minimizing balance sheet risks.

Fundamental Strength & Profitability

These metrics reveal the efficiency and profitability of General Dynamics. A solid return on equity and margins illustrates the company's capability to generate profits and deliver value to shareholders, emphasizing its strong operational footing.

Metric	2025	2024	2023
Return on Equity	16.43%	17.14%	15.56%
Return on Assets	7.35%	6.77%	6.05%
Net Margin	8.01%	7.93%	7.84%
EBIT Margin	10.31%	10.34%	10.37%
EBITDA Margin	11.60%	12.20%	12.41%
Gross Margin	15.13%	15.43%	15.78%
R&D to Revenue	0.93%	1.18%	1.21%

The company's profitability metrics indicate efficient use of assets and equity to generate earnings, further complementing its dividend payment capacity.

Price Development

Dividend Scoring System

Criteria	Score	Bar
Dividend yield	3
Dividend Stability	5
Dividend growth	3
Payout ratio	5
Financial stability	4
Dividend continuity	5
Cashflow Coverage	4
Balance Sheet Quality	4

Rating

General Dynamics Corporation offers a compelling dividend profile with a strong history of payments and a disciplined approach to dividend growth. Its financial metrics suggest the dividends are sustainable and well-covered by earnings and cash flows. With a score of 33 out of 40, GD’s dividend strategy aligns well with income-focused investors, providing robust stability and manageable growth prospects. Despite a modest yield, the reliability and consistency in payouts make it an attractive choice for long-term dividend investors.