It’s Cheap,

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It’s Cheap, and a Shutdown Won’t Hurt It for Long.

A government shutdown is looming—but that’s no reason to avoid defense contractor General Dynamics. Any politics-induced weakness would just make the stock even more attractive.

General Dynamics (ticker: GD) is as sturdy and dependable as any of the big U.S. prime contractors, alongside Boeing (BA), Lockheed Martin (LMT), and Northrop Grumman (NOC). The company is locked into long-term contracts to produce some of the U.S. military’s most iconic assets, such as the M1 Abrams main battle tank and next-generation nuclear submarines, and it has a growth kicker in its Gulfstream business-jet segment.


Key Data

General Dynamics

Recent Price $221.00

YTD Change -10.9%

Market Value $60.3 B

2024E P/E 14.8

Dividend Yield 2.4%

E=estimate

The stock, down 11% in 2023, hasn’t been acting like one of the steadiest growers in the market. That makes little sense. Defense spending by the U.S. and its allies shows no signs of slowing in a more geopolitically volatile world, and rebuilding stocks of munitions and equipment after large transfers to Ukraine will juice industry sales in the coming years. Gulfstream is preparing to launch a new jet, which adds to the potential upside, and the stock remains cheap relative to its own history and its peers. It also has a history of dividend increases and share buybacks.


“Unfortunately, in today’s climate, it makes sense to be long a defense contractor, and with General Dynamics, there’s the added bonus of the Gulfstream inflection coming up,” says Boyar Research President Jonathan Boyar.



General Dynamics’ defense business is strong and getting stronger. The company had a record committed backlog—orders for products and services—of $91 billion at the end of the second quarter, while its total estimated contract value was $129 billion, representing three years of revenue.

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