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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
General Dynamics Corporation (XNYS:GD) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GD
Name:
GENERAL DYNAMICS CORPORATION (XNYS:GD)
Sector:
1.83B
Industry:
Aerospace & Defense
CEO:
Ms. Phebe Novakovic
Total Employees:
103,100
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 25.73% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF GENERAL DYNAMICS CORPORATION(GD) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AEROSPACE & DEFENSE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
224.88
One Month Price Target:
$225.95
Six Month Price Target :
$231.32
Likely Price in One Year's Time:
Ticker:
$237.77
Likely Trading Range Today Under (Normal Volatility)
$224.29
Price Upper limit ($) :
$225.69
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$216.52
This week:
$206.18
This month :
$187.47
Other Primary facts
Market Cap:
61.58B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
274.25M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
9.15%
-10.93%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$263.68
$245.79
$186.08
$203.97
Medium risk (<10%) entry points
Buy Call
Sell Call
$239.97
Buy Put:
Sell Put:
$236.15
$209.75
$213.61
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GD
Sharpe Ratio:
2.24%
Comparison:
GD, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 106.21% higher than the industry
& is -1.85% lower than the market/S&P 500 average
Average Returns/Yield of
GD
Daily returns:
0.05%
Weekly returns:
0.25%
Monthly returns:
1.00%
Yearly returns:
10.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is 14.71% above industry average
Classification:
GD, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.77
Statistical test of Returns:
GD has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.84%
Weekly Volatility:
4.10%
Monthly Volatility:
8.21%
Yearly Volatility:
28.43%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.56%
Volatility in last five trading days has been -69.72% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.72%
Weekly VaR:
-8.32%
Monthly VaR:
-16.63%
How Much Can the price of
GD
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-14%
Worst case (decline):
-57.62%
This translates to price declining to:
$193.09
This translates to price declining to:
$95.30
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
GD is a 17.40% riskier investment compared to the market/S&P 500 & is 0.58% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -41.88% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GD
Beta in relation to market/S&P 500--0.85
Expected beta in 1 year's time:
0.662
Expected beta in 3 year's time:
0.937
Unlevered (debt free) Beta:
0.548
Beta in relation to Nasdaq (XNAS):
0.523
Beta in relation to all global stocks::
0.648
Beta Comparison & Analysis
Beta of competitors/peers::
1.028
Beta is -17.08% lower than peers
Average Industry Beta:
1.007
Beta is -15.30% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.07%
Sustainable growth rate is -39.42% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.030
Alpha is 656.65% above industry average alpha yield
Alpha is 190% higher than market/& is unsustainably high
Analysis of Cost of Capital of
GD
Equity cost of capital:
0.090
Equity cost of capital is -10.51% below industry mean WACC
Unlevered (without debt) cost of capital:
5.78%
Before-tax cost of debt:
1.57%
After-tax cost of debt:
1.24%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.24%
WACC is -12.18% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$140.28
Revenue growth rate per share of (3Y):
3.42
Annual revenue growth rate is -85.47% below industry average
EPS:
$11.68
Expected Annual growth rate of EPS (3Y):
-1.51%
Expected future EPS growth rate is -119.99% lower than the Aerospace & Defense industry
Free cash flow (FCF) per share:
$19.02
Balance sheet equity growth per share: 29.80%
Equity growth rate per share is -17250.93% lower than the industry
Debt per share
$43.16
EBITDA per share
$18.13
Valuation Analysis Today of
GD
P/E Ratio:
19.04
P/E Ratio of Competitors/Peers:
28.08
P/E ratio is -32.20% lower than main peers & is -59.48% lower than the industry
Stock price/value with industry average P/E ratio: $548.87
GD is -59.03% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $88.03
Present value of the expected future dividends only: $71.38
P/S (Price to Sales ratio):
1.6
Price to sales ratio is -83.14% below the industry mean
P/B (Price to book value ratio):
3.42
Price to free cash flow: 11.82
Price to free cash flow ratio is -69.66% lower than the industry
Net income growth rate (3Y):
3.32%
Net income growth rate is 9.56% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 10.06%
Dividend yeild: 2.18%
Previous Dividend: $1.26
Previous adjusted dividend: $1.26
Previous Dividend: $4.90
Expected next dividend best case: $1.32
Expected next dividend worst case: $1.20
Average dividend payment (long-term): $1.15
Average dividend increase/decrease (growth rate) % per period: 1.99%
Expected next dividend payment date: 11/03/2022
Expected next dividend record date: 29/09/2022
-
Previous dividend payment date: 08/05/2022
Previous dividend record date: 07/01/2022
-
Dividend History:
2022-06-30--$1.26
2022-01-13--$1.19
2021-07-01--$1.19
2022-04-07--$1.26
2021-10-07--$1.19
2021-04-08--$1.19
Dividend growth rate is -115.06% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
65.71%
Net debt to equity ratio:
56.99%
Debt to assets ratio:
23.27%
Net debt to assets ratio:
20.18%
Debt-to-asset ratio is -56.64% below industry average
Ability to repay debt:
Interest coverage ratio:
24.02
Interest coverage ratio is 188.81% more than industry average
Looking forward:
Debt growth rate:
-8.56%
Annual debt growth is -109% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.708
Statistical significance of correlation:
GD has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is 30.71% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
0.076
Covariance of price movement with the market:
0.081
Kurtosis
5.486
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.362
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
GD
Gross Profit Margin Ratio:
67%
Operating Profit Margin Ratio:
10.74%
Operating profit margin is -102.16% lower than the industry
Net Profit Margin Ratio:
67%
Effective Tax Rate:
15.42%
Effective tax rate is -35.00% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.20%
Return on equity (ROE) is 129.82% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.45%
Return on assets (ROA) is 50.92% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
1.48
Current ratio is -53.21% below industry average
Cash Conversion Cycle (days):
80.8
Cash conversion cycle is -85.97% below industry average
The remaining useful life of property plant & equipment is: 0.2 years
Stock based compensation to net income ratio:
2.93%
In-depth Efficiency Analysis
Revenue generated per employee:
373.2K
Each employee generates 8% more revenue than industry average revenue per employee
EBITDA generated per employee:
48.2K
Each employee generates 29% more EBITDA than industry average revenue per employee
Profit generated per employee:
31.8K
Each employee generates 395% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
17.7K
Each employee generates -863% less free cash flow than industry average revenue per employee
Assets/Capital per employee
291.8K
Each employee generates -863% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
GD
EMERSON ELECTRIC CO. (XNYS:EMR)
JOHNSON CONTROLS INTERNATIONAL PLC (XNYS:JCI)
NORTHROP GRUMMAN CORPORATION (XNYS:NOC)
EATON CORPORATION PUBLIC LIMITED COMPANY (XNYS:ETN)
WASTE MANAGEMENT, INC. (XNYS:WM)
IHS Markit Ltd. (XNYS:INFO)
ROPER TECHNOLOGIES, INC. (XNYS:ROP)
FEDEX CORPORATION (XNYS:FDX)
CANADIAN PACIFIC RAILWAY LIMITED (XNYS:CP)
Current Analyst Ratings
Strong buy�33%
Buy�29%
Hold�25%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
4/3/22
Revenue:
38.47B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
32.03B
6.45B
-
2.31B
2.31B
-
-
2.31B
-
207.00M
888.00M
4.97B
4.13B
3.28B
3.88B
598.00M
3.28B
Statement of Cash Flow
Date:
Period:
213.00M
Differed Income Tax :
- 106000.00K
Stock Based Compensation :
96.00M
Change in Working Capital :
1.11B
Accounts Receivables:
26.00M
Other Working Capital:
675.00M
Other Non-Cash Items:
- 72000.00K
Net Cash Provided by Operating Activities:
1.97B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/3/22
2022
Q1
2.91B
-
2.91B
10.90B
5.55B
1.44B
20.79B
5.45B
20.11B
1.93B
-
-
2.59B
30.08B
-
50.88B
3.19B
1.34B
-
6.36B
3.15B
14.04B
11.84B
5.16B
18.83B
-
32.86B
482.00M
35.80B
- 1865000.0K
-
April 3, 2022 at 6:00:00 AM
34.34B
18.01B
50.88B
-
13.17B
10.3B
-
- 147000.00K
- 147000.00K
-
-
- 294000.00K
- 330000.00K
107.00M
- 517000.00K
-
1.30B
2.91B
1.60B
1.97B
- 141000.00K
1.83B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
GD
2023
2024
2025
2026
2027
$284.11
$300.39
$317.61
$335.81
$355.06