General Dynamics vs General Electric Which Offers More Value?

General Dynamics and General Electric are two prominent companies in the aerospace and defense sector, but they differ in their focus and product offerings. General Dynamics is primarily known for its defense technologies and services, including combat vehicles, submarines, and information systems. On the other hand, General Electric has diversified interests, ranging from aviation and healthcare to renewable energy and power generation. Investors often compare the performance of these two stocks to assess their potential for growth and stability in the market.

General Dynamics or General Electric?

When comparing General Dynamics and General Electric, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between General Dynamics and General Electric.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. General Dynamics has a dividend yield of 2.23%, while General Electric has a dividend yield of 0.5%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. General Dynamics reports a 5-year dividend growth of 7.54% year and a payout ratio of 41.22%. On the other hand, General Electric reports a 5-year dividend growth of -2.87% year and a payout ratio of 12.65%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with General Dynamics P/E ratio at 23.67 and General Electric's P/E ratio at 32.29. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. General Dynamics P/B ratio is 3.75 while General Electric's P/B ratio is 10.69.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, General Dynamics has seen a 5-year revenue growth of 0.26%, while General Electric's is -0.44%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with General Dynamics's ROE at 16.59% and General Electric's ROE at 26.39%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $311.29 for General Dynamics and $183.71 for General Electric. Over the past year, General Dynamics's prices ranged from $243.53 to $315.93, with a yearly change of 29.73%. General Electric's prices fluctuated between $91.55 and $194.80, with a yearly change of 112.78%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.