(GD) General Dynamics Raises Quarterly Dividend

March 4th, 2010

General Dynamics (GD) raised its quarterly dividend to 42 cents per share on the company’s common stock, payable May 7, 2010, to shareholders of record as on April 9.  The dividend represents a 10.5% increase on the previous quarterly dividend of 38 cents.

General Dynamics is a well-run company that is likely to continue to deliver on expectations driven by strong revenue growth, margin expansion and cash flow generation. Strong defense outlays should further improve the company’s outlook for shareholders while an increasing funded backlog and an improving balance sheet are the other positive factors.

The company has one of the strongest balance sheets among its peers with a low debt-to-capitalization of 20.3% (Zacks industry average was 90.6%) for fiscal 2009. General Dynamics’ free cash flow from operations also reached $2.5 billion.

Management also returns a substantial portion of its free cash flow to shareholders through share repurchases and incremental dividend. During fiscal 2009, the company repurchased 3.6 million shares and has a repurchase authorization for 9.4 million shares pending.

General Dynamics, headquartered in Falls Church, Virginia, is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies. The company operates through four business segments ? Information Systems & Technology, Combat Systems, Marine Systems, and Aerospace.

General Dynamics operates through four business segments ? Information Systems & Technology, Combat Systems, Marine Systems, and Aerospace. The major competitors of the company are Northrop Grumman Corporation (NOC), Lockheed Martin Corporation (LMT), EMBRAER – Empresa Brasileira de Aeronáutica S.A. (ERJ) and Force Protection Inc. (FRPT).

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