Every ballistic missile submarine the U.S. Navy operates traces back to a shipyard whose original founder lost control of his own invention within years of building it. That same shipyard now sits inside a defense and aerospace conglomerate spanning submarines, business jets, and combat vehicles, and it just posted a record backlog north of $136 billion with margins expanding across nearly every division.
General Dynamics (GD)
Business Quality Score: 97 / 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.
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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 Corporation (GD) is a Reston, Virginia-based aerospace and defense company operating through four segments: Aerospace (Gulfstream jets), Marine Systems (submarines), Combat Systems (armored vehicles), and Technologies (GDIT). Incorporated in 1952 as successor to Electric Boat, it has built U.S. Navy submarines for over 125 years while diversifying into aviation and defense tech.
Dividend engine: 28 years, low payout, real cushion
General Dynamics pays $6.36 per share annually, a 1.77% yield, with a 38.80% payout ratio and a 5-year dividend-growth rate of +37.00%. That’s genuinely conservative for a mature industrial, leaving room for backlog-funded capex and buybacks without strain. The 28-year streak reflects government-backed, multi-decade contract visibility.
Q2 2026: record backlog, margins expanding everywhere
For Q2 ended June 30, 2026, General Dynamics reported revenue of $14.1 billion, up 8.1% year over year, with diluted EPS of $4.24, up 13.4%, beating the $3.96 consensus, per the July 29, 2026 release on PR Newswire. Operating margin expanded 40 basis points to 10.4%, and operating cash flow hit $1.9 billion. Backlog closed at a record $136.5 billion, up 32% year over year, and management raised full-year EPS guidance to $16.80-$16.90.
Growth story: Gulfstream and submarines both firing
Aerospace revenue jumped 15.1% to $3.5 billion as Gulfstream delivered 41 jets, three more than a year earlier, with segment backlog up 20% to $24.0 billion. Marine Systems revenue rose 10.4% to $4.7 billion on submarine volume, reinforced by a $76.6 billion Navy submarine package awarded after quarter-end.
A submarine inventor squeezed out of his own company
John Philip Holland built the Navy’s first commissioned submarine but ran out of money finishing it, selling control to financier Isaac Rice in 1899. Holland ended up as a salaried engineer earning $90 a week while his own company sold his submarines for $300,000 apiece.
Final take
General Dynamics offers a 1.77% yield, $6.36 annual dividend, 28 years of hikes, +37.00% 5-year dividend growth, and a 38.80% payout ratio. The business is backed by a record backlog, expanding margins, and a raised outlook, but execution risk on long-duration submarine programs remains real. Business Quality Score: 97. That’s elite territory, though program execution and budget politics are worth watching.