When you hear about General Dynamics, your mind might immediately leap to their iconic tanks—the mighty beasts that dominate battlefields. However, General Dynamics is a versatile giant in the defense sector, where tanks are merely a part of their broad portfolio.

Surprisingly, it's the marine systems division that plays a bigger role, bringing in a hefty $12.5 billion last year, significantly outpacing the revenue from its combat systems division. You might be astonished to discover that not all their naval projects focus on warships, either.

Recently, General Dynamics secured a lucrative $6.8 billion contract to build oil tankers for the Navy, extending its prowess from battle-ready vessels to logistics and support. This contract involves crafting eight John Lewis-class fleet replenishment oilers, with these ships set to join the Navy's logistics fleet by 2035. The work will be undertaken by the National Steel and Shipbuilding Co. (NASSCO) in San Diego, with the vessels piloted by civilian mariners upon completion.

On the face of it, this contract promises a substantial revenue boost, but let's break down the numbers: $6.8 billion over ten years translates into an annual contribution that only briefly spikes the division's revenue by about 5%. For General Dynamics' overall financials, it’s just a modest 1.6% increase per year, underscoring the impact’s limited scope on the company’s broader earnings.

Moreover, there's the issue of profit margins. General Dynamics’ marine systems division has traditionally had slimmer margins, registering just 7% last year—lower than the overall company's 10%. Consequently, adding business in this segment might not prove the most profitable path compared to other avenues within its operations.

Reflecting these nuances, market response has been tepid. Since the contract's announcement, General Dynamics’ stock nudged up by only 2.6%, remaining almost on par with general market movements. The stock’s valuation also dampens enthusiasm: despite trading at a relatively modest 24 times earnings compared to industry averages, it still carries a higher price-to-sales ratio than historical norms.

For investors weighing on General Dynamics, it’s crucial to evaluate this contract within the bigger picture. While the tanker deal might not radically shift financial outcomes in isolation, it reaffirms General Dynamics' strategy to diversify its offerings beyond traditional defense contracts. Before capitalizing on this development, it's worth investigating further into forward-looking growth sectors that might promise enhanced returns. The buzz around what’s next might conceal deeper opportunities that savvy investors can capitalize on.