General Dynamics logged a 0.47% change today, and is now trading at a price of $220.27 per share.
General Dynamics Corporation (GD) is an American aerospace and defense corporation that has returned a 2.42% dividend yield over the last 12 months.
EPS Growth Sustained Primarily by Reducing the Number of Shares Outstanding with Healthy Leverage Levels:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $39,350 | $37,925 | $38,469 | $39,407 |
| Revenue Growth | n/a | -3.62% | 1.43% | 2.44% |
| Operating Margins | 11.61% | 10.9% | 10.82% | 10.69% |
| Operating Margins Growth | n/a | -6.12% | -0.73% | -1.2% |
| Earnings Per Share | $12.03 | $11.05 | $11.73 | $12.35 |
| EPS Growth | n/a | -8.15% | 6.15% | 5.29% |
| Diluted Shares (MM) | 290 | 286 | 278 | 274 |
| Free Cash Flow (MM) | $1,994 | $2,891 | $3,384 | $3,465 |
| FCF Growth | n/a | 44.98% | 17.05% | 2.39% |
| Capital Expenditures (MM) | $987 | $967 | $887 | $1,114 |
| Net Debt / EBITDA | 2.59 | 2.66 | 2.18 | 2.0 |
General Dynamics Is Reasonably Priced:
General Dynamics has a trailing twelve month P/E ratio of 18.07 compared to the Industrials sector's average of 20.49. The company doesn't issue forward earnings guidance, and the annual average growth rate of its last 5 years of reported EPS is 1.75%. On this basis, the company's PEG ratio is 10.33, which suggests that it is overpriced.
The market is giving General Dynamics a fair value in terms of its book value, since its P/B ratio of 3.873 is consistent with its sector average, which stands at 3.78. The company's shares are currently trading 64.54% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 11.75 * 67.79) = $133.87
General Dynamics's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.
