General Dynamics Corp

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GD : NYSE : Industrial Goods
$189.59 up 0.53 | 0.28%
Today's Range: 188.6 - 189.94
Avg. Daily Volume: 1515500.0
02/21/17 - 4:03 PM ET

Financial Analysis


GENERAL DYNAMICS CORP's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. GENERAL DYNAMICS CORP has very weak liquidity. Currently, the Quick Ratio is 0.46 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.21% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)8233.07809.0
EBITDA ($mil)1229.01158.0
EBIT ($mil)1117.01036.0
Net Income ($mil)797.0764.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)2334.02785.0
Total Assets ($mil)32872.031997.0
Total Debt ($mil)3888.03399.0
Equity ($mil)10976.010738.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin21.2821.31
EBITDA Margin14.9214.82
Operating Margin13.5713.27
Sales Turnover0.950.98
Return on Assets8.989.26
Return on Equity27.8927.61
Debt Q4 FY16 Q4 FY15
Current Ratio1.21.17
Debt/Capital0.260.24
Interest Expense23.019.0
Interest Coverage48.5754.53


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)302.42312.99
Div / share0.760.69
EPS2.622.4
Book value / share36.2934.31
Institutional Own % n/a n/a
Avg Daily Volume1521788.01381761.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 22.60 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 26.35. To use another comparison, its price-to-book ratio of 5.20 indicates a significant premium versus the S&P 500 average of 2.94 and a significant discount versus the industry average of 35.39. The current price-to-sales ratio is below the S&P 500 average, but above the industry average. Upon assessment of these and other key valuation criteria, GENERAL DYNAMICS CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
GD 19.10 Peers 22.60   GD 26.62 Peers 16.87

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

GD is trading at a discount to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

GD is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
GD 17.92 Peers 20.44   GD NM Peers 4.06

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

GD is trading at a valuation on par with its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

GD's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GD 5.20 Peers 35.39   GD 8.69 Peers 197.42

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

GD is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, GD is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
GD 1.82 Peers 1.66   GD -0.37 Peers 6.85

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

GD is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

GD significantly trails its peers on the basis of sales growth

 

 

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