General Dynamics $GD ( ▲ 1.81% ) is the ultimate "boring but profitable" defense contractor, operating four distinct businesses that share one critical trait: their customers absolutely cannot afford product failures. With a near-monopoly on U.S. submarine construction, the premium position in business aviation through Gulfstream, and dominant roles in combat systems and government IT, GD has built an empire of predictable cash flows backed by a $90.6 billion backlog. The company returned 94% of free cash flow to shareholders in 2024 while maintaining 27 consecutive years of dividend increases. While not a high-growth story, GD offers steady returns for investors betting on sustained defense spending and the continued prosperity of the ultra-wealthy. The key risk is execution on the massive submarine production ramp-up over the next decade.

CTV should be central to any growth marketer’s Q4 strategy. And with Roku Ads Manager, launching high-performing holiday campaigns is simple and effective.

With our intuitive interface, you can set up A/B tests to dial in the most effective messages and offers, then drive direct on-screen purchases via the remote with shoppable Action Ads that integrate with your Shopify store for a seamless checkout experience.

Don’t wait to get started. Streaming on Roku picks up sharply in early October. By launching your campaign now, you can capture early shopping demand and be top of mind as the seasonal spirit kicks in.

Get a $500 ad credit when you spend your first $500 today with code: ROKUADS500. Terms apply.

Holiday performance starts now.

Think of General Dynamics as the ultimate "things that go boom and zoom" company. While most people know them for those sleek Gulfstream jets that CEOs use to hop between continents, GD is actually running four distinct businesses that all share one thing in common: their customers absolutely cannot afford for their products to fail.

Aerospace (24% of revenue) - This is where GD builds flying palaces for the ultra-wealthy. Their Gulfstream jets aren't just planes; they're essentially flying offices that can connect any two cities in the world non-stop. The G700, their newest baby, can fly 7,750 nautical miles at nearly the speed of sound. When a Fortune 500 CEO needs to get from New York to Dubai for a meeting and back home for dinner, Gulfstream makes that possible. They also run Jet Aviation, which provides maintenance and services for these flying masterpieces.

Marine Systems (30% of revenue) - Here's where things get serious. GD builds nuclear-powered submarines for the U.S. Navy - and they're basically the only game in town. These aren't your grandfather's submarines; they're underwater cities with nuclear reactors, advanced sonar systems, and enough firepower to level a small country. They're currently building two types: Columbia-class ballistic missile subs (the Navy's #1 priority) and Virginia-class attack subs. Each submarine takes years to build and costs billions.

Combat Systems (19% of revenue) - This segment makes the Army's heavy hitters: Abrams main battle tanks and Stryker wheeled combat vehicles. They're also the exclusive supplier of these platforms to the U.S. military, which is like having a monopoly on making the world's most expensive, most lethal vehicles. Plus, they're getting into the robot warfare game with autonomous combat vehicles.

Technologies (27% of revenue) - The most mysterious segment, employing about 40,000 people who do everything from modernizing Pentagon IT systems to building classified spy gadgets. Think of them as the government's tech support team, but for national security.

GD's business model is beautifully simple: they build incredibly complex, expensive things that customers use for decades. About 69% of their revenue comes from the U.S. government, which is basically the world's most reliable customer (they always pay their bills, eventually). The remaining 31% comes from wealthy individuals, corporations, and foreign governments who want the best money can buy.

The magic is in the long-term contracts. When the Navy orders a submarine, they're making a 20-30 year commitment. When a CEO buys a Gulfstream, they're typically keeping it for 10-15 years. This creates incredibly predictable revenue streams and deep customer relationships.

The company measures success through program execution (delivering on time and on budget), customer satisfaction, and return on invested capital (13.2% in 2024 ↗️).

General Dynamics has mastered the art of being a big fish in very specific, very profitable ponds. Rather than trying to compete everywhere, they've built dominant positions in markets with sky-high barriers to entry.

In submarines, GD essentially has a monopoly on U.S. Navy business. This isn't because of regulatory capture - it's because building nuclear submarines requires such specialized facilities, workforce, and institutional knowledge that only a handful of companies globally can do it. The barriers to entry are measured in decades and billions of dollars. Their main "competitor" is actually their partner on some programs, which tells you everything about this market.

The business aviation market is more competitive, with Gulfstream facing off against Bombardier, Dassault, and Embraer. But Gulfstream has carved out the ultra-premium niche - they hold 405 city-pair speed records, more than any other manufacturer. When time is literally money (and you have lots of money), Gulfstream is often the only choice.

In combat systems, GD faces traditional defense contractors like BAE Systems and Lockheed Martin. However, being the sole-source provider of Abrams tanks and Stryker vehicles creates massive switching costs. You can't just swap out a tank like you'd change smartphone brands - these platforms represent integrated systems with decades of training and infrastructure built around them.

The company's reputation for on-time, on-budget delivery has become self-reinforcing - customers pay premium prices for the confidence that comes with proven execution.

2024 Revenue: $47.7 billion ↗️ (up 12.9% from 2023)

The customer base tells the whole story:

For GD to be a great investment, you need to believe:

The risks that could derail the investment:

General Dynamics is essentially a bond-like investment with equity upside potential. The $90.6 billion backlog provides remarkable revenue visibility, and their dominant positions in submarines and premium business jets create sustainable competitive advantages.

The company trades on execution rather than innovation - they're not trying to invent the next iPhone, they're trying to build submarines and jets better than anyone else. Their 13.2% return on invested capital ↗️ and consistent cash generation suggest they're succeeding.

However, this isn't a growth story in the traditional sense. Revenue growth will likely track defense spending and business aviation cycles. The real opportunity is in the submarine ramp-up over the next decade - if they execute successfully, it could drive substantial returns.

For investors seeking steady dividends (they've increased the dividend for 27 consecutive years), predictable cash flows, and exposure to defense spending, GD fits the bill. Just don't expect explosive growth - this is a company built for the long haul, much like the submarines and jets they manufacture.

The stock isn't cheap at current levels, but quality rarely is. If you believe in a multi-decade defense spending cycle and the continued prosperity of the ultra-wealthy, General Dynamics offers a relatively safe way to play both themes. Just remember: in defense contracting, boring is beautiful, and GD has mastered the art of profitable boredom. 🎯

AI-written, human-approved

Disclaimer: This guide is for informational purposes only and does not constitute financial advice, investment recommendations, or an offer or solicitation to buy or sell any securities. The information contained in this report has been obtained from sources believed to be reliable, but StrataFinance does not guarantee its accuracy, completeness, or timeliness.