General Dynamics Corp. GD recently announced that its board of directors has approved a 5.6% increase in quarterly dividend rate. The company’s revised quarterly dividend will be $1.50 per share, payable on May 9, 2025, to its shareholders of record at the close of the business on April 11.

The recent increase represents the company’s 28th consecutive annual dividend hike. Following this hike, GD’s new annualized dividend rate is $6 per share, resulting in an annualized dividend yield of 2.3%, based on its share price of $262.96 as of March 5, 2025. The company’s current dividend yield is better than the Zacks S&P 500 composite’s 1.26%.

Can General Dynamics Sustain Dividend Hikes?
 

General Dynamics saw a healthy backlog of $90.6 billion at the end of the fourth quarter of 2024, driven by a robust inflow of orders. At the end of the quarter, the projected contract value, which combines the overall backlog with the potential contract value, was $144 billion. This contract value implies a year-over-year increase of 9.1%. The strength of the order flow was driven by strong demand across the company’s product and services portfolio.

Such remarkable order and backlog trends imply strong demand for the company's products, thereby boosting its revenue generation potential. This, in turn, should enable General Dynamics to generate solid cash flow operations and thereby duly reward its shareholders with dividend hikes in the future, like the latest one.

Other Defense Companies’ Recent Dividend Hikes
 

Here are some defense companies that have been rewarding shareholders with impressive dividend payouts.

On Jan. 27, 2025, Howmet Aerospace Inc. HWM announced that its board of directors approved a 25% hike in quarterly dividend to 10 cents per share. The dividend will be payable on April 1, 2025, to its shareholders.

Howmet boasts a long-term (three to five years) earnings growth rate of 22.1%. The Zacks Consensus Estimate for HWM’s 2025 sales implies an improvement of 8.5% from the prior-year figure.

On Feb. 28, 2025, L3Harris Technologies, Inc. LHX announced that its board of directors approved a 3.4% increase in quarterly dividend to $1.20 per share. This marks the company's 24th consecutive year of raising its dividends.

L3Harris boasts a long-term earnings growth rate of 7.3%. The Zacks Consensus Estimate for LHX’s 2025 sales implies an improvement of 3.6% from the prior-year figure.

GD Stock’s Price Movement
 

In the past month, GD’s shares have risen 3.2% against the industry’s decline of 1%.

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GD’s Zacks Rank & A Stock to Consider
 

General Dynamics currently carries a Zacks Rank #4 (Sell).

A better-ranked stock in the same industry is Leidos Holdings, Inc. LDOS, which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Leidos has a long-term earnings growth rate of 7.4% and a dividend yield of 1.2%.

The Zacks Consensus Estimate for LDOS’ 2025 sales indicates year-over-year growth of 2.6%.

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General Dynamics Corporation (GD) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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