1.73% Dividend Yield, 27 Years of Dividend Hikes – A Defense-and-Aerospace Workhorse With A Backlog Moat
The kind of operator that doesn’t need hype to win—it just keeps collecting billion‑dollar orders, turning them into real cash, and quietly building a queue of work so long it starts to look like a competitive weapon. Its footprint spans everything from high‑end business jets to submarines, armored vehicles, and mission‑critical tech, which means results aren’t tied to one product cycle or one customer mood swing. When execution is solid, this type of business can feel almost “rate‑like”: not because it’s boring, but because demand tends to be structural and the next contract often shows up before the last one is finished.
General Dynamics (GD)
Financial Score: 98 / 99
Quick Tip
To keep your portfolio strong, stay on top of the financials for each company you hold. Solid companies mean better returns, so be sure to check in on their quarterly and annual numbers.Interesting stocks usually score 80+ on the Financial Scale, with top players hitting 90+. If that score dips below 80, it might be a good time to consider cutting ties before things take a turn.General Dynamics (GD) is a U.S.-based global aerospace and defense company headquartered in Reston, Virginia, with operations spanning business aviation, ship construction and repair, land combat systems, and technology products and services. It ended 2025 as a very large-scale operator—over 110,000 employees worldwide—and reported $52.6 billion in 2025 revenue, which tells you this is not a “single-program” story but a diversified industrial machine tied to long-duration government and commercial demand. That mix matters for dividend investors because it tends to smooth the ride: one segment can be messy while another carries the year, and the whole platform still produces the cash a rising dividend needs.
Dividend discipline that still leaves room to reinvest
The dividend setup here is the kind income investors love because it’s straightforward and not stretched: a 1.73% yield with a $6.00 annual dividend and a 38.83% payout ratio. Those numbers say the company isn’t trying to “buy” shareholder affection with an aggressive payout—it’s paying you, but it’s also keeping plenty of earnings inside the business to fund programs, capex, and balance-sheet flexibility. You also get 27 consecutive years of dividend growth, plus +37.00% dividend growth over the last five years, which is a solid signal that management treats the dividend like a policy, not a marketing line. Put it together and it reads like a sustainable rhythm: steady hikes, not reckless ones, and a payout level that can absorb a normal defense-cycle wobble without forcing a reset.
The latest quarter shows real scale—and real cash
In its most recent reported quarter (fourth quarter 2025, reported January 27, 2026), the company posted revenue of $14.4 billion and net earnings of $1.1 billion, translating to diluted EPS of $4.17. What I like even more for dividend durability is the cash conversion: cash provided by operating activities was $1.6 billion in the quarter, which the company described as 137% of net earnings—exactly the kind of “cash is real” profile you want behind a long dividend streak. And management wasn’t starving the business to do it; they also pointed out they invested nearly $1.2 billion in capital expenditures during 2025, up 27% from 2024, implying they’re still spending to protect future capacity while paying shareholders today.
Growth you can measure: orders, backlog, and a bigger “work queue”
This is where General Dynamics starts to look less like a cyclical industrial and more like a business with a visible runway: it reported $22.4 billion of orders in Q4 2025, producing a consolidated book‑to‑bill of 1.6x for the quarter (and 1.5x for the full year). The payoff is the backlog, which ended the year at $118 billion—basically a giant queue of funded work that can support revenue and earnings even if the next quarter’s headlines get noisy. And if you want a “bigger than backlog” lens, the company also reported total estimated contract value of $179 billion at year-end (including estimated potential contract value), up 24% from a year earlier—another datapoint that demand didn’t just hold up, it expanded.
Fun Fact: It literally helped start the U.S. Submarine Force
General Dynamics’ roots trace back to Electric Boat, which was established in 1899 to build John Holland’s submersible design. Just one year later, the U.S. Navy accepted the USS Holland—widely cited as the world’s first practical submarine—marking the beginning of the U.S. Submarine Force. So when people call GD a “prime contractor,” it’s not just modern branding: one of its legacy businesses helped define an entire category of naval warfare more than a century ago.
Final Take – A reliable dividend grower with a backlog moat
General Dynamics offers a 1.73% dividend yield, a $6.00 annual dividend, a 38.83% payout ratio, and 27 straight years of dividend hikes, plus +37.00% dividend growth over the past five years—an income profile that looks disciplined rather than stretched. The latest quarter supports the story: Q4 2025 revenue was $14.4 billion, net earnings were $1.1 billion, diluted EPS was $4.17, and operating cash flow was $1.6 billion (137% of net earnings), all reported on January 27, 2026. The growth angle is also tangible: $22.4 billion in quarterly orders, 1.6x book-to-bill, and $118 billion in backlog, with total estimated contract value of $179 billion, up 24% year over year—this is what “visibility” looks like in numbers. Financial Score: 98. This is the kind of score that points to a genuinely reliable operator (90+ is “real deal” territory), but it’s still not bulletproof: program execution, timing of government awards, and segment-level margin bumps can all create choppy quarters even when the long-term pipeline is strong.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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