Bought 4 shares of General Dynamics⚔ (GD) for 164,5$/share. Total cost – 560 EUR (677$) Annual post-tax dividend inome – 10,2 EUR. Yield on cost – 1,8% post-tax.
Done some portfolio diversification and added some of this 😎
Jup the good old defence sector and one of the best stocks there is General Dynamics that has increased dividends each year for past 29 years, so its a Dividend Aristocrat. Company pay 1,1$/quarter or 4,4$ annualized and that makes it 2,7% pre-tax yield, which makes it one of lowest yield in my portfolio, but there is a catch here. First of all with EPS 11$ leading to P/E – x15 and payout ratio – 40% making the dividends safe and share price not to high. Last dividend increase was from 1,02$ to 1,1$ or +6% YoY. With such low payout I expect for this stock to be on the top of my dividend increase list. 10y ago dividends were just 0,42$/q so it has nearly tripled in past decade.
Now how is their financials. Y2020 income declined from 39,4bn$ in 2019 to 37,9$ and Net income slides from 3,5bn$ to 3,2$, but if you you look at Q4 you see that result was very similar to 2019Q4 sales 10,5bn$ Net income 1bn$. Covis had its tool on defence sector as well, but not to great extend. Balance also looking good with Equity ratio – 31% (15,7bn$/51,3bn$) and NetDebt/EBITDA – x2,3 (14,4bn$-2,8bn$/5,1bn$) and leading tp S&P A credit rating whitch is a high investment grade. What I like to note is that company managed to have a good combination of growing dividends, share number decrease by share buybacks and Equity increase, which makes the business viable in L/T perspective and with growing tensions with China I think defence spending is doomed to grow in US and its allies.