General Dynamics Corp

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GD : NYSE : Industrial Goods
$153.81 | %
Today's Range: 150.00 - 154.36
Avg. Daily Volume: 1,435,100
09/23/16 - 4:01 PM ET

Financial Analysis


GENERAL DYNAMICS CORP's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. GENERAL DYNAMICS CORP has very weak liquidity. Currently, the Quick Ratio is 0.45 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 2.49% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)7665.07882.0
EBITDA ($mil)1185.01177.0
EBIT ($mil)1070.01058.0
Net Income ($mil)758.0752.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1899.04032.0
Total Assets ($mil)31769.033654.0
Total Debt ($mil)3436.03413.0
Equity ($mil)10995.011276.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin21.821.15
EBITDA Margin15.4514.93
Operating Margin13.9613.42
Sales Turnover0.980.94
Return on Assets9.358.51
Return on Equity27.1425.7
Debt Q2 FY16 Q2 FY15
Current Ratio1.191.24
Debt/Capital0.240.23
Interest Expense23.020.0
Interest Coverage46.5252.9


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)305.28322.73
Div / share1.521.38
EPS2.442.27
Book value / share36.0234.94
Institutional Own % n/a n/a
Avg Daily Volume1483036.01535752.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 24.95 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 4.30 indicates a premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 31.11. The price-to-sales ratio is below both the S&P 500 average and the industry average, indicating a discount. 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 16.37 Peers 24.95   GD 23.94 Peers 15.47

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

GD is trading at a significant 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 15.40 Peers 19.48   GD 2.34 Peers 3.31

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

GD is trading at a discount to its peers.

 

Discount. 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 trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GD 4.30 Peers 31.11   GD 9.36 Peers 203.59

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 1.52 Peers 1.55   GD -1.85 Peers 4.07

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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