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General Dynamics' (GD) Arm Wins Support Deal for Antennas

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General Dynamics Corporation’s GD business unit, Missions Systems, recently clinched a contract for providing services to support the Tactical Network-On the Move systems and equipment. The contract has been awarded by the U.S. Army Contracting Command, Aberdeen Proving Ground, MD.

Valued at $74.9 million, the contract is expected to conclude by Jan 22, 2023.

Significance of On-the-Move Antennas

General Dynamics’ SATCOM (satellite communication) On-the-Move antennas provide reliable, high data rate satellite communications while on the move, thereby enabling secure, beyond-line-of-sight communications for vehicles in motion.

Designed for rugged tactical environments, these antennas can be mounted on wheeled and tracked vehicles, high-speed boats, aircraft and Unmanned Aerial Vehicles. These antennas provide reliable X, Ku or Ka Mil and commercial band satellite communications whenever and wherever needed.

General Dynamics’ Growth Prospects in Military Antennas

Nations are increasing their defense spending in a bid to modernize their defense structures and include technologically advanced arsenals and equipment. In this context, efficient On-the-Move antennas form an integral part of any defense vehicle whether it be ground vehicles, maritime vessels or aircraft.

Amid rising terrorism and tensions worldwide, the hunt for an effective communication system that can enable secure and reliable on-the-move communications during any challenging military mission has propelled demand for a technologically advanced antenna.

Consequently, in lieu of such strong demand, defense majors like General Dynamics have been making antennas that could ensure better surveillance and augment the tracking abilities of the military during their mission. The company’s excellence in manufacturing secured and technologically advanced On-the-Move antennas may have increased its prospects of winning multiple contracts. The latest contract win is a testament to that.

Per the report from Markets and Markets, the military antenna market is projected to witness a CAGR of 5.9% through 2022. Such strong growth prospects exhibit ample opportunities for companies like GD.

Peer Prospects

Considering strong growth prospects in military antennas, defense primes who are likely to benefit are Lockheed Martin LMT, Raytheon Technologies RTX and Textron TXT.

Lockheed Martin’s Wide Angle ESA Fed Reflector antenna is a hybrid of a phased array Electronically Steerable Antenna (ESA) and a parabolic dish. It increases the coverage area by 190% compared with traditional phased array antennas at a much lower cost. It optimizes and securely connects warfighting platforms to enable joint all-domain command and control.

The long-term earnings growth rate for Lockheed Martin stands at 3.6%. Shares of LMT have rallied 10.5% in the past year.

Raytheon Technologies’ MAGR2K enhances GPS acquisition and performance and provides all-in-view GPS satellite tracking and GPS integrity. The open architecture and modular design allow easy upgrades.

Raytheon’s long-term earnings growth rate is pegged at 13.2%. RTX’s shares have appreciated 29.8% in the past year.

Textron’s One System Remote Video Terminal delivers full-motion videos, images and critical geospatial data from a variety of sources directly to the warfighter’s fingertips.

The long-term earnings growth rate for Textron stands at 28.3%. Shares of TXT have returned 49% to its investors in the past year.

Price Movement

In the past year, shares of General Dynamics have rallied 38.4% against the industry’s decline of 27.4%.

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Zacks Investment Research

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Zacks Rank

General Dynamics currently carries a Zacks #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

General Dynamics Corporation (GD) : Free Stock Analysis Report

Textron Inc. (TXT) : Free Stock Analysis Report

Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report

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