As recessionary fears mount and strong defensive positions become ever more difficult to find, General Dynamics' (GD) rank as one of the top five military contractors makes it stand out among its big-cap peers. The Virginia-based producer of naval ships, military combat systems and Gulfstream business jets has been trading within 6% of its recent all-time highs, and it is up 10% over the past year. The company generates about two-thirds of its total revenue from the U.S. government, which might make you a little nervous in an election year where Democrats are recommending troop withdrawals from the Middle East. But even if the next president decides to move troops out of the Middle East, analysts say that defense and military spending forecasts will remain strong.

General Dynamics has received numerous contracts from the U.S. military recently. Notably, this month, the company received a $99 million order for 183 mine-resistant, ambush-protected, or MRAP, vehicles for troops overseas. And we'll continue to see orders like this roll in as ongoing global terror risks will keep the military's infrastructure growing regardless of what ensues in Iraq and Afghanistan.

The continual flow of orders from the U.S. military has added nicely to GD's revenues, and it's this well-balanced revenue base that makes it stand out from the other top defense contractors. Along with the demand for MRAP vehicles, its recent contracts include large orders for maintenance and support work or production of submarines, surface ships, military vehicles and information-technology systems. And these prime contracts are set to keep rolling in regardless of and throughout the looming potential recession, while the company's products and IT support will remain in high-demand globally. So no irony is intended when I call GD a defensive pick.

General Dynamics has been a steady performer over the years, and 2007 should come in as another good year on the books. Fourth-quarter results are expected to be posted on January 23, and analysts are expecting earnings per share to increase about 25% over last year, to $1.41 a share from $1.13 a share. I wouldn't be surprised to see results blow past the consensus though, as they did when third-quarter results were announced in November, beating the Street's earnings per share guidance by 10 cents. Over the past three years GD's average earnings growth rate has been around 19%, and it is projecting its profits to grow another 12.6% in 2008. Its returns on invested capital hover close to 16%, covering its cost of capital by more than 7%, and analysts praise management's decisions on asset allocation and project focus. Unless the world financial markets really go into breakdown mode, watch for its big revenue drivers to keep churning out growth, with the Gulfstream business jet division as well as Land Systems division on track to help the most.