General Dynamics (GD) vs. Cadre Holdings (CDRE): Which Aerospace & Defense Stock Is Ready for Takeoff?

The aerospace market continues to experience robust growth due to the escalating demand for commercial aircraft. This demand surge, particularly prominent in emerging markets, is driven by factors such as increasing middle-class populations and urbanization, resulting in higher passenger travel. The global aerospace market is projected to grow at a CAGR of 7.8% by 2034.

By 2036, the aviation sector will have generated $1.5 trillion in GDP and 15.5 million direct employments for the global economy if its current development trajectory is maintained. Upon accounting for the effects of international tourism, these figures may increase to 97.8 million employment and $5.7 trillion in GDP.

Against this backdrop, let’s compare two aerospace stocks to analyze which stock is ready for takeoff: General Dynamics Corporation (GD) and Cadre Holdings, Inc. (CDRE).

The Case for General Dynamics Corporation Stock

With a $73.16 billion market cap, General Dynamics Corporation (GD) is an aerospace and defense company worldwide. It operates through four segments: Aerospace; Marine Systems; Combat Systems; and Technologies.

GD’s stock has gained 5.4% over the past month to close the last trading session at $266.07.

GD’s 0.83x trailing-12-month asset turnover ratio is 5.5% higher than the 0.79x industry average. Also, its 6.35% trailing-12-month Return on Total Assets is 19.9% higher than the 5.29% industry average.

GD’s revenue for the fiscal third quarter that ended September 30, 2024, increased 10.4% year-over-year to $11.70 billion. The company’s operating earnings grew 11.7% from the year-ago quarter to $1.20 billion. In addition, its net earnings stood at $930 million and $3.35 per share, up 11.2% and 10.2% over the prior-year quarter, respectively.

For the fourth quarter ending December 2024, GD’s revenue is expected to increase 13.9% year-over-year to $13.29 billion. Its EPS for the ongoing quarter is expected to increase 18.6% year-over-year to $4.32. Moreover, the company surpassed revenue estimates in three of the trailing four quarters, which is impressive.

GD’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock has a B grade for Momentum and Sentiment. GD is ranked #22 out of 71 stocks in the Air/Defense Services industry.

In addition to the POWR Ratings I’ve just highlighted, you can see GD’s ratings for Growth, Value, Quality, and Sentiment here.

The Case for Cadre Holdings, Inc. Stock

Valued at $1.48 billion by market cap, Cadre Holdings, Inc. (CDRE) manufactures and distributes safety that provides protection to users in hazardous or life-threatening situations in the United States and internationally. The company operates in two segments: Products and Distribution. 

Shares of CDRE have surged 11.9% over the past month to close the last trading session at $31.45.

In terms of the trailing-12-month gross profit margin, CDRE’s 40.67% is 29.2% higher than the 31.49% industry average. However, its 6.34% trailing-12-month net income margin is 2.5% lower than the 6.51% industry average.

CDRE’s revenue increased 85.9% year-over-year to $895.48 million for the fiscal 2024 third quarter that ended September 30, 2024. Moreover, the company’s net earnings came in at $136.48 million and $0.51 per share.

For the fiscal third quarter that ended September 30, 2024, CDRE’s net sales were reported at $109.41 million. The company’s gross profit stood at $40.02 million. However, its net income and net income per share declined 66.9% and 69% year-over-year to $3.66 million and $0.09, respectively.

Analysts expect CDRE’s revenue for the quarter ending December 2024 to increase 37.9% year-over-year to $171.77 million. Its EPS is expected to grow 90% year-over-year to $0.48 for the same quarter. It surpassed the consensus revenue and EPS estimates in three of the trailing four quarters. 

CDRE’s fundamentals are reflected in its POWR Ratings. The stock has an overall C rating, translating to Neutral in our proprietary rating system.

CDRE has a C grade for Growth, Value, Sentiment, and Stability. It is ranked #29 in the same industry.

Click here for the additional POWR Ratings for CDRE (Momentum and Quality).

General Dynamics Corporation (GD) vs. Cadre Holdings (CDRE): Which Aerospace & Defense Stock Is Ready for Takeoff?

The U.S. aerospace and defense industry is witnessing significant developments in space capabilities, which are crucial for national security and military operations. The satellite manufacturing and launch sector is rapidly evolving, driven by technological advancements and the growing demand for satellite services.

Leading aerospace & defense companies GD and CDRE stand to capitalize on the optimistic industry outlook. However, GD’s strong profitability might make it the better aerospace stock pick.

Our research shows that the odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Air/Defense Services industry here.

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GD shares were trading at $265.34 per share on Tuesday afternoon, down $0.73 (-0.27%). Year-to-date, GD has gained 4.25%, versus a 28.27% rise in the benchmark S&P 500 index during the same period.

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.

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