General Dynamics: Undervalued Defense Stock for 2030

General Dynamics operates in what appears to be an ideal market environment for the coming decade. With constant international frictions and global security concerns, the U.S. defense industry remains top-of-mind for policymakers and investors alike. Research and Markets predicts the U.S. aerospace market will expand at a compound annual growth rate of 2.4% from 2025 to 2034, while the military deployable infrastructure market is projected to reach $1.29 billion by 2029, growing at a 6.3% CAGR.

Perhaps most compelling is the space militarization market, which Markets and Markets expects to reach $88.6 billion by 2030, expanding at a robust 7.4% CAGR from 2023. General Dynamics has been identified by Research and Markets as a leading manufacturer in the aerospace industry, noted for delivering ‘vital solutions across multiple domains.’ This positioning across multiple high-growth defense segments makes General Dynamics particularly well-suited for the security challenges of the 2020s and beyond.

General Dynamics’ recent financial performance underscores its operational strength and growth trajectory. For the quarter ended June 29, 2025, the company reported revenue of $25.264 billion, representing 11.3% growth compared to $22.707 billion in the year-earlier quarter. More impressively, net income grew by 17.8%, climbing from $1.704 billion to $2.008 billion during the same period.

The company’s financial stability is further evidenced by its strong cash position, with $1.523 billion in cash and cash equivalents at the end of the most recently reported quarter. This substantial liquidity provides ample cushion for ongoing operations and dividend payments. Additionally, General Dynamics Information Technology secured a significant $1.5 billion U.S. government contract for enterprise IT modernization in May, ensuring a steady revenue stream and reinforcing the company’s relationship with its largest customer.

General Dynamics stands out among defense sector peers for its attractive valuation metrics. With a trailing 12-month price-to-earnings ratio of 15.37x as of October 2, 2025, the company trades at a significant discount to competitors Lockheed Martin (17.81x) and Raytheon Technologies (36.75x). Boeing, meanwhile, lacks a meaningful P/E ratio due to recent earnings challenges, making General Dynamics’ consistent profitability particularly noteworthy.

The company offers investors a forward annual dividend yield of 1.82%, which while not spectacular in absolute terms, represents an attractive income stream within the aerospace and defense sector. More importantly, General Dynamics’ strong financial position and cash reserves suggest the dividend is well-supported and has room for future growth. The combination of reasonable valuation and sustainable dividend payments makes GD stock particularly appealing for income-focused investors seeking exposure to the defense sector.

While General Dynamics may not enjoy the same name recognition as defense giants Boeing, Lockheed Martin, and Raytheon Technologies, its under-the-radar status could be a strategic advantage. The company’s diversified operations across aerospace, marine systems, combat systems, and information technology provide multiple avenues for growth without the headline risk associated with some larger competitors.

As defense spending priorities evolve toward space militarization, IT modernization, and deployable infrastructure—all areas where General Dynamics has established expertise—the company is well-positioned to transition from being merely a competitor to becoming an industry leader. With solid financials, reasonable valuation, and exposure to high-growth defense segments, General Dynamics represents a compelling buy-and-hold opportunity for investors looking to capitalize on defense sector growth through 2030 and beyond.