General Dynamics Boost Dividend

By Josh Beckerman 

General Dynamics Corp. has increased its quarterly dividend to 69 cents from 62 cents.

The aerospace and defense company's decision to raise the payout by 11.3% follows an increase last year, from 56 cents.

Uncertainty over military spending has led contractors away from the large-scale acquisitions that dominated the downturn of the 1990s. They are using much of their free cash for buybacks and higher dividends.

General Dynamics' Gulfstream operations helped the company beat analysts' fourth-quarter profit expectations.

Phebe Novakovic, chief executive of General Dynamics, said in January that Gulfstream demand was "quite handsome" in fourth quarter and said Gulfstream output will increase this year.

Boeing Co. announced a 25% dividend increase in December. Lockheed Martin Corp. said in September that its dividend would rise 13%.

Based on Wednesday's closing stock price of $136.25, the new General Dynamics dividend will provide a 2% yield.

Write to Josh Beckerman at [e-mail]

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