# General Dynamics (GD.US)

Canonical: https://gigainvestors.com/s/GD

Analysis as of: 2026-10-16T07:28:43.389Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $337.03 per share; close as of 2026-10-15.

Estimated value: low $208.14 per share, central $259.84 per share, high $301.43 per share. Buy at or below the central value $259.84 per share. Valuation as of 2026-10-16T07:28:43.389Z; scenarios are not confidence intervals.

Expected annual return: 8.3% at the stated quote. About 8.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.10×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.14×

- FY2018: 0.12×

- FY2019: 0.12×

- FY2020: 0.11×

- FY2021: 0.11×

- FY2022: 0.11×

- FY2023: 0.10×

- FY2024: 0.10×

- FY2025: 0.10×

- LTM to Jun 2026: 0.10×

### moat: pass

- ROIC, median of available years: 42.6%

- ROIC, second-lowest year: 38.1%

- Typical minus recent gross margin: 1.3 pp

- Typical gross margin (annual median): 16.7%

- Recent gross margin (lower of latest and 3-year median): 15.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.3%

- ROIC including acquisitions, ten-year median: 12.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: >100%

- FY2018: 91.0%

- FY2019: 55.5%

- FY2020: 46.6%

- FY2021: 38.4%

- FY2022: 38.8%

- FY2023: 43.0%

- FY2024: 38.1%

- FY2025: 36.6%

- LTM to Jun 2026: 42.2%

### economics: pass

- Owner earnings / net income, 5-yr: 0.99×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $18B

- Net income, five-year total: $18B

- Return on incremental invested capital: 15.1%

- Working capital / revenue, annual change: -0.5 pp

- Working capital / revenue, change between three-year averages: -2.7 pp

- Working capital / revenue, final three-year average: 36.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 0.97×

- FY2023: 1.00×

- FY2024: 1.00×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 341.5% vs 38.1%

- Per-share earnings: 9.29 to 13.63 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.8%

- Ordinary dilution, 5-year annual growth: -1.1%

- Market cap gain: $39B

- Cumulative retained earnings: $19B

- Diluted shares, 10-year annual growth: -1.8%

- Diluted shares, 5-year annual growth: -1.1%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 4.9%

- Per-share value change: $4.34

- Per-share value, starting three-year median: $9.29

- Per-share value, ending three-year median: $13.63

- Buybacks concentrated in cheaper years (correlation): 0.20

- Average buyback yield: 2.1%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $11B

- Cumulative net income, 10 years: $33B

- ROIC, first three-year median: >100%

- ROIC, last three-year median: 38.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: $8.29

- FY2017: $9.56

- FY2018: $11.18

- FY2019: $11.98

- FY2020: $11.00

- FY2021: $11.55

- FY2022: $12.19

- FY2023: $12.02

- FY2024: $13.63

- FY2025: $15.45

### accounting: pass

- Sloan accruals: -1.6%

- Receivables to sales index (DSRI): 0.87×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 3.8%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.22×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.87×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 1.1%

- FY2017: -2.8%

- FY2018: 0.4%

- FY2019: 1.0%

- FY2020: -1.3%

- FY2021: -2.0%

- FY2022: -2.3%

- FY2023: -2.5%

- FY2024: -0.6%

- FY2025: -1.6%

## Holders

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Richard Pzena](https://gigainvestors.com/PIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 6.9% a year for ten years · sales +4.4%

Story as of 2026-10-16T09:58:48.405Z; price observation 2026-10-15.

Price needs cash profits to grow 6.9% a year for ten years

- 2025-06-27: General Dynamics Wins a $1.9B Contract to Aid Virginia Class Submarines ([finance.yahoo.com](https://finance.yahoo.com/news/general-dynamics-wins-1-9b-132800203.html))

- 2025-07-24: GD Q2 Deep Dive: Backlog Growth and Defense Demand Drive Strong Quarter ([finance.yahoo.com](https://finance.yahoo.com/news/gd-q2-deep-dive-backlog-053344728.html))

- 2025-08-01: US Navy orders additional destroyer from General Dynamics Bath Iron Works ([investing.com](https://www.investing.com/news/company-news/us-navy-orders-additional-destroyer-from-general-dynamics-bath-iron-works-93CH-4164899))

- 2025-09-25: General Dynamics secures $1.5 billion IT contract for STRATCOM ([finance.yahoo.com](https://finance.yahoo.com/news/general-dynamics-secures-1-5-174057367.html))

- 2026-01-31: General Dynamics Balances Record Backlog Navy Win And Gulfstream Tensions ([finance.yahoo.com](https://finance.yahoo.com/news/general-dynamics-balances-record-backlog-111103661.html))

- 2026-07-29: General Dynamics Tops Second-Quarter Forecasts as Aerospace and Marine Businesses Drive Growth ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/general-dynamics-tops-second-quarter-134025725.html))

### Sales · FY2025–2026

sales +4.4%; source https://www.sec.gov/Archives/edgar/data/40533/000004053326000006/gd-20251231.htm; observed 2026-01-30.

- FY2017: $31B 

- FY2018: $36B 

- FY2019: $39B 

- FY2020: $38B 

- FY2021: $38B 

- FY2022: $39B 

- FY2023: $42B 

- FY2024: $48B 

- FY2025: $53B 

- FY2026: $55B 

### Gross margin · FY2026

gross margin 15.4%; source https://www.sec.gov/Archives/edgar/data/40533/000004053326000006/gd-20251231.htm; observed 2026-01-30.

- FY2017: 20.2% 

- FY2018: 18.4% 

- FY2019: 17.8% 

- FY2020: 16.7% 

- FY2021: 16.7% 

- FY2022: 16.8% 

- FY2023: 10.0% 

- FY2024: 15.4% 

- FY2025: 15.1% 

- FY2026: 15.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in aerospace & defense; annual sales are USD 52.5 billion.

- Source: https://www.sec.gov/Archives/edgar/data/40533/000004053326000006/gd-20251231.htm (filed 2026-01-30); FY2025: revenue 52550000000; grossProfit 7951000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); GD.US: General Dynamics Corporation operates as an aerospace and defense company worldwide. It operates through four segments: Aerospace, Marine Systems, Combat Systems, and Technologies. The Aerospace segment produces and sells business jets; and offers aircraft maintenance and repair, management, aircraft-on-ground support, customer support and custom completion services, modifications, upgrades, and lifecycle sustainment support services. The Marine Systems segment designs and builds nuclear-powered submarines, surface combatants, and auxiliary ships for the United States Navy and Jones Act ships for commercial customers, as well as provides maintenance, modernization, and lifecycle support services for navy ships; offers and program management, planning, engineering, and design support services for submarine construction programs. The Combat Systems segment manufactures land combat solutions, such as wheeled and tracked combat vehicles, Stryker wheeled combat vehicles, piranha vehicles, weapons systems, energetics and munitions, mobile bridge systems with payloads, tactical vehicles, main battle tanks, and armored vehicles; and offers modernization programs, support and sustainment services, and development programs. The Technologies segment provides information technology solutions and mission support services; mobile communication, computers, and command-and-control mission systems; intelligence, surveillance, and reconnaissance solutions to military, intelligence, and federal civilian customers; cloud services, cybersecurity, network modernization, artificial intelligence; machine learning; application development, high-performance computing, and 5G and advanced communications services; and unmanned undersea vehicle manufacturing and assembly services. The company was founded in 1899 and is headquartered in Reston, Virginia.

### Why customers stay

Margins ranged from 10% to 15.4% during 2023–25; it earns 42.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2023: grossProfit / revenue = 10%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2024: grossProfit / revenue = 15.4%.

- Source: https://www.sec.gov/Archives/edgar/data/40533/000004053326000006/gd-20251231.htm (filed 2026-01-30); FY2025: grossProfit / revenue = 15.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); 10-year return on capital observations [[2017,3.4148598840270616],[2018,0.9098256507650709],[2019,0.5546135051113165],[2020,0.4658943033175383],[2021,0.3840785023225761],[2022,0.3884240713438487],[2023,0.42952544773854096],[2024,0.38100878788668086],[2025,0.3661219852073063],[2026,0.42235684367147]]; median 0.42594114570500546. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 5.6% of cash earnings on expansion; earns 15.1% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2016: growth capex 0; upkeep 392000000; owner earnings 2633000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2017: growth capex 0; upkeep 428000000; owner earnings 2925000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2018: growth capex 0; upkeep 690000000; owner earnings 3418000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2019: growth capex 158000000; upkeep 829000000; owner earnings 3484000000. Growth capex / owner earnings = 0.04535017221584386.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2020: growth capex 0; upkeep 967000000; owner earnings 3078000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2021: growth capex 0; upkeep 887000000; owner earnings 3260000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2022: growth capex 123603438.04101336; upkeep 990396561.9589866; owner earnings 3283603438.0410132. Growth capex / owner earnings = 0.03764262048487644.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2023: growth capex 41000000; upkeep 863000000; owner earnings 3315000000. Growth capex / owner earnings = 0.012368024132730015.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); FY2024: growth capex 30000000; upkeep 886000000; owner earnings 3782000000. Growth capex / owner earnings = 0.007932310946589107.

- Source: https://www.sec.gov/Archives/edgar/data/40533/000004053326000006/gd-20251231.htm (filed 2026-01-30); FY2025: growth capex 237000000; upkeep 924000000; owner earnings 4210000000. Growth capex / owner earnings = 0.056294536817102135.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); Incremental return on capital 0.15142947577679589, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); Dividend observations: [[2016,911000000],[2017,986000000],[2018,1075000000],[2019,1152000000],[2020,1240000000],[2021,1315000000],[2022,1369000000],[2023,1428000000],[2024,1529000000],[2025,1593000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/40533/000004053326000006/gd-20251231.htm (filed 2026-01-30); FY2025: cash repurchases 637000000 USD.

### Are managers owners

Insiders own 0.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); GD.US SharesStats.PercentInsiders = 0.5579999999999999 percentage points; cache date 2026-10-16.

### What could break it

"The U.S. government provides a significant portion of our revenue." (SEC filing, Jan 2026)

- Source: https://www.sec.gov/Archives/edgar/data/40533/000004053326000006/gd-20251231.htm (filed 2026-01-30); The U.S. government provides a significant portion of our revenue.

### What the price says

The price assumes cash profits grow 6.9% yearly over ten years; actual growth was 5.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-30); Ten-year compound average after fade. Initial solved rate 0.08543385138167048. Price 337.03; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 9.29429484589104 → FY2025 15.453794622373131. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $150.74 per share

- 2016-11: $175.35 per share

- 2016-12: $172.66 per share

- 2017-01: $181.08 per share

- 2017-02: $189.81 per share

- 2017-03: $187.20 per share

- 2017-04: $193.79 per share

- 2017-05: $203.25 per share

- 2017-06: $198.10 per share

- 2017-07: $196.33 per share

- 2017-08: $201.35 per share

- 2017-09: $205.58 per share

- 2017-10: $202.98 per share

- 2017-11: $207.16 per share

- 2017-12: $203.45 per share

- 2018-01: $222.48 per share

- 2018-02: $222.45 per share

- 2018-03: $220.90 per share

- 2018-04: $201.31 per share

- 2018-05: $201.71 per share

- 2018-06: $186.41 per share

- 2018-07: $199.76 per share

- 2018-08: $193.40 per share

- 2018-09: $204.72 per share

- 2018-10: $172.58 per share

- 2018-11: $184.89 per share

- 2018-12: $157.21 per share

- 2019-01: $171.17 per share

- 2019-02: $170.22 per share

- 2019-03: $169.28 per share

- 2019-04: $178.72 per share

- 2019-05: $160.82 per share

- 2019-06: $181.82 per share

- 2019-07: $185.94 per share

- 2019-08: $191.27 per share

- 2019-09: $182.73 per share

- 2019-10: $176.80 per share

- 2019-11: $181.74 per share

- 2019-12: $176.35 per share

- 2020-01: $175.44 per share

- 2020-02: $159.69 per share

- 2020-03: $132.31 per share

- 2020-04: $130.62 per share

- 2020-05: $146.83 per share

- 2020-06: $149.46 per share

- 2020-07: $146.74 per share

- 2020-08: $149.35 per share

- 2020-09: $138.43 per share

- 2020-10: $131.33 per share

- 2020-11: $149.35 per share

- 2020-12: $148.82 per share

- 2021-01: $146.68 per share

- 2021-02: $163.47 per share

- 2021-03: $181.56 per share

- 2021-04: $190.23 per share

- 2021-05: $189.91 per share

- 2021-06: $188.26 per share

- 2021-07: $196.03 per share

- 2021-08: $200.31 per share

- 2021-09: $196.03 per share

- 2021-10: $202.75 per share

- 2021-11: $188.97 per share

- 2021-12: $208.47 per share

- 2022-01: $212.10 per share

- 2022-02: $234.45 per share

- 2022-03: $241.18 per share

- 2022-04: $236.53 per share

- 2022-05: $224.91 per share

- 2022-06: $221.25 per share

- 2022-07: $226.67 per share

- 2022-08: $228.93 per share

- 2022-09: $212.17 per share

- 2022-10: $249.80 per share

- 2022-11: $252.39 per share

- 2022-12: $248.11 per share

- 2023-01: $233.06 per share

- 2023-02: $227.91 per share

- 2023-03: $228.21 per share

- 2023-04: $218.34 per share

- 2023-05: $204.18 per share

- 2023-06: $215.15 per share

- 2023-07: $223.58 per share

- 2023-08: $226.64 per share

- 2023-09: $220.97 per share

- 2023-10: $241.31 per share

- 2023-11: $246.97 per share

- 2023-12: $259.67 per share

- 2024-01: $264.99 per share

- 2024-02: $273.25 per share

- 2024-03: $282.49 per share

- 2024-04: $287.09 per share

- 2024-05: $299.77 per share

- 2024-06: $290.14 per share

- 2024-07: $298.71 per share

- 2024-08: $299.36 per share

- 2024-09: $302.20 per share

- 2024-10: $291.61 per share

- 2024-11: $284.01 per share

- 2024-12: $263.49 per share

- 2025-01: $256.98 per share

- 2025-02: $252.60 per share

- 2025-03: $272.58 per share

- 2025-04: $272.12 per share

- 2025-05: $278.49 per share

- 2025-06: $291.66 per share

- 2025-07: $311.61 per share

- 2025-08: $324.57 per share

- 2025-09: $341.00 per share

- 2025-10: $344.90 per share

- 2025-11: $341.63 per share

- 2025-12: $336.66 per share

- 2026-01: $351.09 per share

- 2026-02: $357.05 per share

- 2026-03: $343.22 per share

- 2026-04: $344.30 per share

- 2026-05: $346.82 per share

- 2026-06: $354.24 per share

- 2026-07: $383.42 per share

- 2026-08: $371.35 per share

- 2026-09: $331.83 per share

- 2026-10: $332.42 per share

## Annual estimated value (USD per share)

- FY2016: low $93.04 per share, central $105.10 per share, high $121.16 per share

- FY2017: low $109.76 per share, central $131.81 per share, high $152.34 per share

- FY2018: low $133.05 per share, central $160.65 per share, high $187.04 per share

- FY2019: low $149.91 per share, central $183.19 per share, high $213.49 per share

- FY2020: low $143.16 per share, central $172.81 per share, high $200.23 per share

- FY2021: low $143.08 per share, central $172.74 per share, high $200.80 per share

- FY2022: low $142.53 per share, central $174.42 per share, high $203.10 per share

- FY2023: low $156.57 per share, central $194.74 per share, high $226.64 per share

- FY2024: low $170.98 per share, central $215.01 per share, high $250.62 per share

- FY2025: low $191.34 per share, central $240.52 per share, high $280.08 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:34:25.518Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/40533/000004053326000006/gd-20251231.htm); period 2025-12-31, filed 2026-01-30.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.