General Dynamics Boosts Dividend by 5.6%, Continuing Strong Payouts
General Dynamics Corp. (GD) has announced a 5.6% increase in its quarterly dividend rate. The company will now pay $1.50 per share, with the dividend payable on May 9, 2025, to shareholders of record as of the close of business on April 11.
This marks the 28th consecutive year that General Dynamics has raised its dividend. The revised annualized dividend rate now stands at $6 per share, yielding an annualized dividend yield of 2.3% based on GD’s share price of $262.96 as of March 5, 2025. Notably, this yield surpasses the Zacks S&P 500 composite’s yield of 1.26%.
Can General Dynamics Sustain Dividend Increases?
As of the end of the fourth quarter of 2024, General Dynamics held a significant backlog of $90.6 billion, attributed to a strong influx of orders. The total projected contract value, which includes the backlog and potential contract value, reached $144 billion, reflecting a year-over-year increase of 9.1%. This robust order flow indicates a solid demand for the company’s diverse product and service portfolio.
Such encouraging order and backlog trends signal the potential for strong revenue generation, which is crucial for maintaining solid cash flow. This, in turn, supports future dividend hikes, including the one just announced.
Recent Dividend Increases Among Defense Firms
Several other defense companies have also been rewarding their shareholders with notable dividend increases.
On January 27, 2025, Howmet Aerospace Inc. (HWM) revealed a 25% increase in its quarterly dividend, now set at 10 cents per share, effective April 1, 2025.
Howmet anticipates a long-term earnings growth rate of 22.1%, and the Zacks Consensus Estimate suggests an 8.5% increase in 2025 sales compared to the previous year.
On February 28, 2025, L3Harris Technologies, Inc. (LHX) announced a 3.4% increase in its quarterly dividend to $1.20 per share, marking the company’s 24th consecutive year of raising dividends.
L3Harris projects a long-term earnings growth rate of 7.3%, with Zacks Consensus Estimates indicating a 3.6% sales growth for LHX in 2025 relative to the prior year.
GD Stock Movement Analysis
Over the past month, GD’s shares have increased by 3.2%, contrasting with a 1% decline in the defense industry’s performance.
Image Source: Zacks Investment Research
Current Zacks Rank & Stocks Worth Watching
General Dynamics is currently assigned a Zacks Rank #4 (Sell).
In contrast, Leidos Holdings, Inc. (LDOS) is rated more favorably with a Zacks Rank #2 (Buy). Leidos boasts a long-term earnings growth rate of 7.4% and a dividend yield of 1.2%.
The Zacks Consensus Estimate for LDOS’s 2025 sales suggests a year-over-year growth of 2.6%.
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General Dynamics Corporation (GD): Free Stock Analysis Report
Leidos Holdings, Inc. (LDOS): Free Stock Analysis Report
L3Harris Technologies Inc (LHX): Free Stock Analysis Report
Howmet Aerospace Inc. (HWM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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