5 Best Dividend Stocks for Passive Income

4 – General Dynamics (NYSE: GD)

At the fourth place is a company from the Aerospace & Defense Industry. Although Covid-19 had adverse effects on this industry, the company managed to limit the damage. Company’s chairman and CEO, Phebe N. Novakovic stated that: “… we continue to reduce debt and invest in the company for future growth.” Oakmark Funds is bullish about GD. Here is what they said in their 2020 Q2 investor letter:

““General Dynamics is one of the leading U.S. defense contractors and controls the world’s premier business jet franchise (Gulfstream). Short-term fears that the coronavirus will hurt demand for business jets drove down the share price, so we were able to purchase this high-quality business at a large discount to both its historical and peer valuation levels. Taking a longer term view, we believe the company is poised to benefit from new product introductions within its business jet division, an improvement in free cash flow conversion and a highly visible, decade-long increase in deliveries of next generation nuclear-powered submarines. As these positives come into clearer view, we believe the discount to intrinsic value will close.”

GD shares currently trade at $148.36 and have a trailing P/E of 13.5. This figure is also the lowest in our list. The stock’s current quarterly dividend is $1.10 corresponding to an annualized dividend yield of nearly 3%. Compared to the previous period, dividend payout was bumped up by 7.8%. There were a total of 37 hedge funds with long positions in the stock at the end of September.