Yahoo Finance General Dynamics Corporation (NYSE:GD) Will Pay US$0.93 In Dividends
If you are interested in cashing in on General Dynamics Corporation’s (NYSE:GD) upcoming dividend of US$0.93 per share, you only have 4 days left to buy the shares before its ex-dividend date, 04 October 2018, in time for dividends payable on the 09 November 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding General Dynamics can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.
View our latest analysis for General Dynamics
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Does it pay an annual yield higher than 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has the amount of dividend per share grown over the past?
Is is able to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does General Dynamics fit our criteria?
The current trailing twelve-month payout ratio for the stock is 35.2%, which means that the dividend is covered by earnings. Going forward, analysts expect GD’s payout to remain around the same level at 32.0% of its earnings, which leads to a dividend yield of 2.0%. In addition to this, EPS should increase to $11.63.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of GD it has increased its DPS from $1.4 to $3.72 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes GD a true dividend rockstar.
Compared to its peers, General Dynamics generates a yield of 1.8%, which is high for Aerospace & Defense stocks but still below the market’s top dividend payers.
Next Steps:
Keeping in mind the dividend characteristics above, General Dynamics is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three relevant aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for GD’s future growth? Take a look at our free research report of analyst consensus for GD’s outlook.
Valuation: What is GD worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether GD is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
