General Dynamics
is a leading defense contractor supplying products and technology to marine
systems, combat systems, information systems and aerospace (basically
submarines, tanks, aircraft and command and control systems). The company has
grown earnings and dividends 14% and 12% respectively over the last 10 years
and has earned a consistently high 17-18% return on equity. GD should be able to continue to match that
record because of:
(1) growth in
commercial aerospace division,
(2)
acquisitions,
(3) an aggressive
cost reduction program
Negatives:
(1) a large percentage of its sales are
dependent on government spending both in the US Europe ,
(2) its backlog has declined recently.
GD has a debt to
equity ratio of approximately 17%, is rated A++ by Value Line and its stock
provides a yield of 3.1%.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio Since 2003
GD 3.1% 8%
29% 10
Debt/ EPS Down Net Value Line
Equity ROE Since 2003 Margin Rating
GD 17% 16% 0 8% A++
*most companies in GD’s industry
don’t pay a dividend
Chart
Note: GD made good initial progress off its March 2009 low, quickly surpassing the downtrend off its September 2008 high (straight red line) and the November 2008 trading high (green line). However, the advance soon stalled thereafter and the stock has been in an intermediate term trading range (purple lines) since. Long term, GD is also in a trading range (blue lines). As you can see, the stock is near challenging its 50 day moving average (wiggly red line). The Dividend Growth Portfolio owns a full position in GD---though GD has been traded, selling in the high 60’s/low 70’s and buying back in the low 60’s, The upper boundary of its Buy Value Range is $38; the lower boundary of its Sell Half Range is $80.
Note: GD made good initial progress off its March 2009 low, quickly surpassing the downtrend off its September 2008 high (straight red line) and the November 2008 trading high (green line). However, the advance soon stalled thereafter and the stock has been in an intermediate term trading range (purple lines) since. Long term, GD is also in a trading range (blue lines). As you can see, the stock is near challenging its 50 day moving average (wiggly red line). The Dividend Growth Portfolio owns a full position in GD---though GD has been traded, selling in the high 60’s/low 70’s and buying back in the low 60’s, The upper boundary of its Buy Value Range is $38; the lower boundary of its Sell Half Range is $80.
2/13
No comments:
Post a Comment