Updated on February 4th, 2026 by Bob Ciura
Investors looking for high-quality dividend growth stocks should take a closer look at the Dividend Aristocrats.
The Dividend Aristocrats are a group of 69 companies in the S&P 500 Index, with 25+ consecutive years of dividend increases.
You can see a full downloadable spreadsheet of all 69 Dividend Aristocrats, along with several important financial metrics such as price-to-earnings ratios and dividend yields, by clicking on the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
We review all 69 Dividend Aristocrats each year. The next stock in the series is aerospace and defense company General Dynamics (GD).
General Dynamics is a leader in the aerospace and defense industry, with a long history of dividend increases and steady growth.
Business Overview
General Dynamics was incorporated in 1952 through the combination of the Electric Boat Company, Canadair, and several others.
The company has evolved over the years to enter new businesses of the future. The biggest transformation came in the 1990’s, when General Dynamics started buying technology-oriented companies.
General Dynamics currently generates annual sales nearing $50 billion.
The company’s revenue stream has been diversified in recent years, and it now no longer relies as much upon the Aerospace segment as it used to.
A breakdown of its segments and their contribution to revenue is below:
Aerospace (21% of revenue)
Combat Systems (19% of revenue)
Technologies (33% of revenue)
Marine Systems (27% of revenue)
The company’s Aerospace segment is focused on business jets and services, while the remainder of the company is engaged with defense-related operations.
General Dynamics makes the well–known M1 Abrams tank, Stryker vehicle, Virginia–class submarine, Columbia–class submarine, and Gulfstream business jets.
These strong businesses have combined to produce consistent growth for many years.
Growth Prospects
General Dynamics reported Q4 2025 results on January 28th, 2026, beating revenue estimates in three of the four segments, offset by lower margins.
Company-wide revenue rose 7.8% to $14.38 billion and diluted earnings per share increased 0.7% to $4.23 from $4.20 on a year-over-year basis.
Aerospace revenue rose 1.2% from the prior year. The total backlog is $21.82 billion. Gulfstream’s book-to-bill ratio was 1.3X, driven by G700 and G800 orders.
Revenue for Marine Systems increased 21.7% on the strength of the Columbia and Virginia-class submarine programs. The segment’s backlog is at $52.34 billion.
Combat Systems revenue grew 5.8%. The total backlog rose significantly on more ammunition and European Land Systems orders. International customers, the M1 upgrade, and ammunition demand are increasing demand.
The company-wide backlog is at a record of $118.0 billion, of which ~$93.5B is funded and ~$24.5B is unfunded. The firm won $22.4B in orders for munitions, Gulfstream jets, Eagle tactical vehicles, other combat platforms, and technology services.
General Dynamics set guidance for revenue of $54.3B – $54.8B and earnings per share of ~$16.10 to $16.20 in 2026.
Competitive Advantages & Recession Performance
General Dynamics has several competitive advantages. First, it is a leader in the defense industry, with very high entry barriers. Defense companies rely on contracts from the U.S. and foreign governments.
A small competitor would have difficulty entering the defense industry and trying to take share.
In addition, General Dynamics has industry-leading brands, such as Gulfstream and Stryker. It has built these brands with significant research and development spending that totals in the hundreds of millions of dollars annually.
Indeed, this is part of the significant barriers to entry for potential competitors.
General Dynamics is built to last. The company performed very well during the last recession:
2007 earnings-per-share of $5.10
2008 earnings-per-share of $6.13 (20% increase)
2009 earnings-per-share of $6.20 (1.1% increase)
2010 earnings-per-share of $6.82 (10% increase)
As you can see, the company grew earnings in each year of the recession, including two years of double-digit growth. It would be difficult to find many companies that grew earnings-per-share by 20% in 2008, but General Dynamics did it.
One primary reason for the company’s excellent recession performance is that it sees steady demand for its products and services each year.
Global conflicts are not likely to cease any time soon, regardless of the economic climate. This will drive ever-increasing levels of defense spending, the US included.
Valuation & Expected Returns
General Dynamics stock has a price-to-earnings ratio of 22, which is above our fair value estimate of 18 times earnings.
If the valuation multiple declines to our fair value estimate of 18, it would reduce annual returns by approximately 3.9% per year over the next five years.
Shareholder returns will be boosted by projected earnings-per-share growth of 6% per year, as well as the current dividend yield of 1.7%.
The dividend payout is highly secure, with a projected 2026 dividend payout ratio of just 37%, which leaves plenty of room for annual dividend increases.
Given all of these factors, we see total annual returns of about 3.7% in the coming years. At this projected rate of return, we rate the stock as a hold.
Final Thoughts
General Dynamics is a high-quality business with a long history of growth. Geopolitical risk remains a constant, which gives the company a long runway of growth in the future.
General Dynamics is also a shareholder-friendly company and should continue returning significant cash to shareholders through buybacks and dividends.
The elevated valuation could limit the stock’s annual returns over the next five years, but General Dynamics should be a reliable long-term holding, likely to be highly appreciated by dividend-growth investors.
Additional Reading
If you are interested in finding more high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly:
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