1. General Dynamics is a prime contractor of defense-related products and services, addressing segments like aerospace, marine and combat systems, serving both domestic and international customers. During the third quarter, General Dynamics' revenue rose 3.8% year over year. Revenue from aerospace jumped 15.3% on higher volumes from aircraft manufacturing, while higher U.S. navy ship programs saw the marine systems segment churn out a revenue run rate of 12% during the quarter. Revenue from combat systems wasn't impressive. Operating margins improved by 80 basis points, compared to the same period last year. Aerospace and combat systems contributed chiefly toward operating margins, while returns from marine systems and technology segments dampened. Overall, operating earnings grew 10% during the quarter, riding on the efforts to downsize operating costs and general and administration expenses. Order backlog in respect of contracts at the end of the third quarter was around $60 billion. The stock is trading at six to seven times its 2011 earnings. >To see these stocks in action, visit the 6 Defense Picks for Diversification portfolio on Stockpickr.