General Dynamics Authorizes Repurchase of 10M Shares - Analyst Blog
General Dynamics Corporation (GD) declared that its board of directors has authorized a share buyback plan of up to 10 million shares of the company’s common stock.
The company focuses on enhancing value of its shareholders. In 2014, General Dynamics spent around $3.4 billion on share repurchases. In fact, the company spent $4.2 billion in 2014 on creating value for shareholders via dividends and share buybacks. The current annual dividend yield of the company is 1.81%, significantly higher than the industry average of 1.24%.
In a bid to outwit sequestration hazards, defense companies tend to focus on cutting costs and improving margins. Thus, generating funds for share repurchase reveal their financial strength and display the operational capabilities of the company in spite of a challenging environment.
General Dynamics reported solid results in the fourth quarter of 2014. Adjusted earnings of $2.19 beat estimates by 4.3%, registering a 24.4% year-over-year surge. Quarterly revenues of $8,362 million also surpassed estimates and were up 3.9% from the year-ago figure.
General Dynamics also reported robust financial figures. As of Dec 31, 2014, its cash & cash equivalents were $4,388 million. During 2014, the company’s cash flow from operating activities was about $3,728 million, up from $3,111 million in the year-ago period.
General Dynamics currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Rockwell Collins Inc. (COL), Curtiss-Wright Corporation (CW) and Spirit AeroSystems Holdings, Inc. (SPR). While Spirit AeroSystems sports a Zacks Rank #1 (Strong Buy), Rockwell Collins and Curtiss-Wright each carry a Zacks Rank #2 (Buy).
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