General Dynamics: Dividend Aristocrat That's Undervalued

General Dynamics is a Dividend Aristocrat, and the current yield is above the market average.
The dividend is well covered by earnings and free cash flow.
The stock price has been beaten down during the recent market downturn. The stock trades well below the broader market average earnings multiple.
General Dynamics recently won a large contract for the Virginia-class submarine.
Introduction and Thesis
We entered the year with the US stock market setting new highs. But the coronavirus has pummeled the market creating bargains in some stocks. We may still have more down days, but there are bargains to be had now. From this perspective, I am now writing about General Dynamics Corporation (NYSE: GD). The company is a Dividend Aristocrat that is undervalued. The stock is being impacted by not only the general downturn but also a declining backlog until recently. But with that said, General Dynamics is a Dividend Aristocrat having raised the dividend for 28 consecutive years. I consider the dividend safe, and it is growing at a decent clip. Furthermore, the company has market leading platforms in marine and land defense systems and business jets. Hence, I view the stock as a long-term buy.
Source: Defense News
Overview of General Dynamics
General Dynamics, which was founded in 1952, is primarily a manufacturer of combat platforms for the US DoD. It focuses primarily on nuclear submarines and armored vehicles. In addition, General Dynamics also has exposure to the commercial market with its business jet products. The company bought CRSA expanding its presence in IT. The company now operates in five business segments: Aerospace (23% of sales), Combat Systems (17%), Marine Systems (23%), Information Technology (23%), and Mission Systems (13%). The company makes the well-known M1 Abrams tank, Stryker vehicle, Virginia class submarine and Gulfstream business jets. Based on revenue, General Dynamics is the third largest defense company. General Dynamics had... Read more