That cash generation ability means that TWC has the wherewithal to hike its dividend payout in the near-term. Right now, TWC pays a 56-cent quarterly dividend payout for a 2.37% yield.
(GD - Get Report)
earns the lion's share of its revenues building ships, defense systems, and armored vehicles for the Department of Defense -- and it owns a lucrative smaller gig building Gulfstream business jets. While the flashy jets may get a lot of attention, it's the contracting business for the DoD that pays more than 70% of the bills.
While defense spending cuts continue to be a big black cloud for contractors right now (especially with the Fiscal Cliff resolution unclear), GD's mission-critical equipment helps give the firm a big advantage in keeping contracts alive. Vehicles like the Abrams tank have huge installed bases here at home and with our allies -- that gives GD a lucrative service business for a combat vehicle that's expected to remain in service for the next forty years. And with Congress eager to appease the defense lobby if defense spending gets slashed, international sales are likely to continue to get greenlit by Capitol Hill.
The convalescing economy also holds hope for the bizjet market. Gulfstream has been shipping more planes every year since the Great Recession, a strong sign for General Dynamics' non-defense business. As the business cycle heats up, so should the business case for buying a big-dollar corporate airplane. GD's current dividend payout sits at 51 cents per share, a 3.06% yield at current price levels. With ample margins and strong cash generation, this stock looks primed for a dividend increase.
For income investors,
(WM - Get Report)
has been turning garbage into gold for years. The $16 billion firm is the largest waste services firm in the country, with more than 270 landfills and a massive fleet of vehicles that spans the U.S. Trash collection is typically a recession-resistant business, with revenues more or less constant in good times and bad. That, and a huge dividend yield at 4.22% make this a solid name for investors who want to play defense.