Summary
General Dynamics' system of moats creates a nearly insurmountable obstacle to competitors.
The Aerospace segment provides effective diversification not seen in most defense contractors .
Dividend Aristocrats historically outperform broader indices.
As a dividend growth investor, I can use General Dynamics' (GD) double-digit three, five and ten year dividend growth record as an argument for investing in the stock. I can point to a world that is in constant conflict as sign that the long term prospects for the company should prove positive. The shares sell for a reasonable valuation. That's a strong selling point in a market where bargains are hard to find, and where most Dividend Aristocrats go for a premium.
However, after digging deeper into this prospective investment, I find the most compelling arguments center around the company's deep, wide moat and outstanding management team. Furthermore, unlike most companies in the defense industry, GD's Aerospace segment effectively diversifies the company's products into the civilian realm. Read on to discover my perspective.
