It' s not everyday that investors are presented with a growth opportunity, supplemented by more-than-modest downside protection, but that's the case with General Dynamics.

General Dynamics (NYSE: GD) is a diversified manufacturer of corporate jets and heavy vehicles, and is the second largest military shipbuilder -- specializing in nuclear-class submarines.

Along with consistent earnings and dividend growth, analysts like GD's platform diversity, with civilian work (Gulfstream corporate jets) complementing defense contract work (Trident submarines, armored vehicles). Analysts expect GD's revenue to increase about 10-13% in 2007, and 9-11% in 2008.

Moreover, GD's shares offer a measure of safety in that the submarine portion of the U.S. defense system is the force projection most likely to continue to be funded by Congress. Along with stealth fighters/bombers, submarines are the least-detectable form of military operations.

Long term, analysts generally see growth in GD's sales of business jets, land vehicles and munitions. Cost containment has been adequate. The Reuters F2007/F2008 EPS consensus estimates for GD are $5.07/$5.71.

The qualifiers? A reduction in U.S. Department of Defense appropriations would hurt GD's results, as would a failure to deliver existing work on time.

The First Call mean rating for GD is: Buy. [19 firms.] Mean 2008 target: $99.00. [high: $106, low: $94.]

Stock Analysis: General Dynamics is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from GD's shares. Sell / Stop Loss if you were to purchase shares in this company: $62.

Readers of this space know that the preference is for long-term plays with companies with demonstrated business models (10 years), in an established market, with an average total annual return on equity of 20% during that span. It also helps if the company has a secular tailwind and/or is one of only a few players in a sector.

On the last point, Northrop Grumman Corp. (NYSE: NOC) ranks very high, and it fares reasonably well in the other categories, too.

Northrop is the U.S.'s No. 3 defense contractor and the No. 1 shipbuilder in the world. Analysts like NOC's operational diversity, cash flow, and solid balance, but the company's standout dimensions, from an investment standpoint, are its electronics systems business (21% of revenue) and its ship building business (17% of revenue).

The electronics business is likely to remain a key player in radar/navigation/communications systems, moving forward, and the ships business is also in a preferred position: it's one of only two nuclear-power submarine makers in the U.S. and the only builder of U.S. aircraft carriers. Of course, no one can predict with any certainty the role aircraft carriers will play in defense operations -- the aircraft carrier's demise has been predicted for (seemingly) the past three decades -- but the sense here is that these ships will retain a role in the decades ahead. The company also builds the B-2 stealth bomber and has a 25% stake in the F-35 next-generation, joint-strike fighter.