November 30, 2023
Top 10 Stock General Dynamics Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: General Dynamics – Top 10 Stock in Dow Jones U.S. Aerospace & Defense Index
General Dynamics is listed as a top 10 stock on November 30, 2023 in the market index D.J. US Defense because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 86 (top 86% performer), Obermatt assesses an overall strong buy recommendation for General Dynamics on November 30, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Aerospace & Defense |
| Index | Dividends USA, D.J. US Defense, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View General Dynamics Strong Buy
| 360 METRICS | November 30, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| SENTIMENT | ||||||||
| SENTIMENT | 92 |
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| 360° VIEW | ||||||||
| 360° VIEW | 86 |
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ANALYSIS: With an Obermatt 360° View of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock General Dynamics are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for General Dynamics. The consolidated Value Rank has an attractive rank of 54, which means that the share price of General Dynamics is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 54% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 66. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 92. But the consolidated Growth Rank has a low rank of 45, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 55 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 86, General Dynamics is better positioned than 86% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 54), secure financing practices (Safety Rank of 66), and positive market sentiment in the professional investor community (Sentiment Rank of 92). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 45), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of General Dynamics is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for General Dynamics very positive
ANALYSIS: With an Obermatt Sentiment Rank of 92 (better than 92% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock General Dynamics is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for General Dynamics. Analyst Opinions are at a rank of 84 (better than 84% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in General Dynamics. The Professional Investors rank is 98, which means that currently, professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 81 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 81% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 92 (more positive than 92% compared with investment alternatives), General Dynamics has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean General Dynamics stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: General Dynamics Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 54 (better than 54% compared with alternatives), General Dynamics shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for General Dynamics. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 84% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 42 which means that the stock price compared with what market professionals expect for future profits is higher than 58% of comparable companies, indicating a low value concerning General Dynamics's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 49 which means that the stock price compared with what market professionals expect for future profit levels is higher than 51% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 32 is also low. Compared with invested capital, the stock price is higher than for 68% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a buy recommendation based on General Dynamics's stock price compared with the company's operational size and dividend yields. Should dividend investors pick General Dynamics? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose General Dynamics only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: General Dynamics Growth Momentum low
| GROWTH METRICS | November 30, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 62 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 38 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 49 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 47 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 45 |
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ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), General Dynamics shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for General Dynamics. While Sales Growth ranks at 62, professionals currently expect the company to grow more than 62% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 38, which means that, currently, professionals expect the company to grow its profits less than 62% of its competitors, and Capital Growth has a low rank of 49. Historic stock returns were also below average with a current Stock Returns rank of 47 which means that the stock returns have recently been below 53% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: General Dynamics Debt Financing Safety above-average
| SAFETY METRICS | November 30, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 46 |
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| REFINANCING | ||||||||
| REFINANCING | 43 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 72 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 66 |
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ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company General Dynamics has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of General Dynamics is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for General Dynamics. Liquidity is at 72, meaning the company generates more profit to service its debt than 72% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 43, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 57% of its competitors. Leverage is also high at a rank of 46, which means that the company has an above-average debt-to-equity ratio. It has more debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 66 (better than 66% compared with alternatives), General Dynamics has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: General Dynamics Above-Average Financial Performance
| COMBINED PERFORMANCE | November 30, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), General Dynamics (Aerospace & Defense, USA) shares have above-average financial characteristics compared with similar stocks. Shares of General Dynamics are a good value (attractively priced) with a consolidated Value Rank of 54 (better than 54% of alternatives), are safely financed (Safety Rank of 66, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on General Dynamics's financial characteristics. As the company General Dynamics's key financial metrics exhibit good value (Obermatt Value Rank of 54) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 66), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 54% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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