"General Dynamics generated $5.1 billion in operating cash flow during 2025, producing $4 billion in free cash flow. Against full-year net income of $4.21 billion, this translates to a 94% free cash flow conversion rate. CFO Kim Kuryea stated on the February 12, 2026 earnings call that the company "expects to return to our free cash flow conversion rate goal of 100% of net income" in 2026."
"The dividend consumes 40.2% of trailing earnings, based on $14.93 in diluted EPS against the $6.00 annual dividend. This payout ratio sits comfortably below the 60% threshold that typically signals dividend stress, leaving substantial room for both dividend growth and reinvestment in the business. The company ended 2025 with $2.3 billion in cash and a $5.7 billion net debt position, down $1.4 billion from the prior year."
General Dynamics paid a $1.50 quarterly dividend on February 6, 2026, yielding 1.67% and annualizing to $6.00 per share. The quarterly payout rose 5.6% from $1.42 in early 2025, reflecting an 8.5% five-year and 10.2% ten-year dividend CAGR. The company generated $5.1 billion in operating cash flow and $4.0 billion in free cash flow in 2025, a 94% free cash flow conversion against $4.21 billion net income, with management targeting 100% conversion in 2026. The $6.00 annual dividend consumes 40.2% of trailing earnings. Year-end 2025 cash totaled $2.3 billion with $5.7 billion net debt, and backlog reached a record $118 billion, up 30% from the prior year.
Read at 24/7 Wall St.
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