NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
NYSE:NOC - New York Stock Exchange, Inc. - US6668071029 - Common Stock
NOC gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 65 industry peers in the Aerospace & Defense industry. While NOC is still in line with the averages on profitability rating, there are concerns on its financial health. NOC has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year NOC was profitable.
In the past year NOC had a positive cash flow from operations.
In the past 5 years NOC has always been profitable.
Each year in the past 5 years NOC had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NOC (4.92%) is comparable to the rest of the industry.
NOC has a Return On Equity of 16.10%. This is amongst the best in the industry. NOC outperforms 84.38% of its industry peers.
NOC has a Return On Invested Capital of 7.04%. This is in the better half of the industry: NOC outperforms 62.50% of its industry peers.
NOC had an Average Return On Invested Capital over the past 3 years of 8.47%. This is in line with the industry average of 7.66%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.92% | ||
| ROE | 16.1% | ||
| ROIC | 7.04% |
ROA(3y)10.69%
ROA(5y)8.94%
ROE(3y)33.35%
ROE(5y)31.14%
ROIC(3y)8.47%
ROIC(5y)9.23%
1.3 Margins
With a decent Profit Margin value of 5.79%, NOC is doing good in the industry, outperforming 60.94% of the companies in the same industry.
In the last couple of years the Profit Margin of NOC has declined.
NOC has a Operating Margin (7.05%) which is in line with its industry peers.
NOC's Operating Margin has declined in the last couple of years.
NOC has a Gross Margin of 16.87%. This is in the lower half of the industry: NOC underperforms 70.31% of its industry peers.
NOC's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.05% | ||
| PM (TTM) | 5.79% | ||
| GM | 16.87% |
OM growth 3Y-16.39%
OM growth 5Y-12.46%
PM growth 3Y-15.48%
PM growth 5Y-13.38%
GM growth 3Y-6.38%
GM growth 5Y-5.87%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NOC is destroying value.
The number of shares outstanding for NOC has been reduced compared to 1 year ago.
Compared to 5 years ago, NOC has less shares outstanding
Compared to 1 year ago, NOC has a worse debt to assets ratio.
2.2 Solvency
NOC has an Altman-Z score of 2.82. This is not the best score and indicates that NOC is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.82, NOC perfoms like the industry average, outperforming 46.88% of the companies in the same industry.
The Debt to FCF ratio of NOC is 6.55, which is on the high side as it means it would take NOC, 6.55 years of fcf income to pay off all of its debts.
NOC has a better Debt to FCF ratio (6.55) than 68.75% of its industry peers.
A Debt/Equity ratio of 1.00 indicates that NOC is somewhat dependend on debt financing.
NOC's Debt to Equity ratio of 1.00 is on the low side compared to the rest of the industry. NOC is outperformed by 76.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 6.55 | ||
| Altman-Z | 2.82 |
ROIC/WACC0.7
WACC10.03%
2.3 Liquidity
NOC has a Current Ratio of 1.09. This is a normal value and indicates that NOC is financially healthy and should not expect problems in meeting its short term obligations.
NOC has a Current ratio of 1.09. This is in the lower half of the industry: NOC underperforms 78.13% of its industry peers.
NOC has a Quick Ratio of 1.09. This is a bad value and indicates that NOC is not financially healthy enough and could expect problems in meeting its short term obligations.
NOC's Quick ratio of 0.97 is on the low side compared to the rest of the industry. NOC is outperformed by 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.83% over the past year.
Measured over the past 5 years, NOC shows a small growth in Earnings Per Share. The EPS has been growing by 4.30% on average per year.
The Revenue has been growing slightly by 5.95% in the past year.
NOC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.48% yearly.
EPS 1Y (TTM)5.83%
EPS 3Y-0.95%
EPS 5Y4.3%
EPS Q2Q%13.27%
Revenue 1Y (TTM)5.95%
Revenue growth 3Y2.21%
Revenue growth 5Y5.48%
Sales Q2Q%2.26%
3.2 Future
The Earnings Per Share is expected to grow by 8.32% on average over the next years. This is quite good.
NOC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.48% yearly.
EPS Next Y12.8%
EPS Next 2Y10.24%
EPS Next 3Y8.66%
EPS Next 5Y8.32%
Revenue Next Year5.66%
Revenue Next 2Y4.63%
Revenue Next 3Y4.63%
Revenue Next 5Y4.48%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
NOC is valuated rather expensively with a Price/Earnings ratio of 19.44.
Based on the Price/Earnings ratio, NOC is valued cheaper than 87.50% of the companies in the same industry.
NOC is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 17.82, the valuation of NOC can be described as rather expensive.
Based on the Price/Forward Earnings ratio, NOC is valued cheaply inside the industry as 82.81% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of NOC to the average of the S&P500 Index (24.44), we can say NOC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.44 | ||
| Fwd PE | 17.82 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NOC is valued a bit cheaper than 64.06% of the companies in the same industry.
87.50% of the companies in the same industry are more expensive than NOC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.56 | ||
| EV/EBITDA | 20.37 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.52
PEG (5Y)4.52
EPS Next 2Y10.24%
EPS Next 3Y8.66%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.71%, NOC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.36, NOC pays a better dividend. On top of this NOC pays more dividend than 89.06% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.28, NOC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
5.2 History
On average, the dividend of NOC grows each year by 9.12%, which is quite nice.
NOC has been paying a dividend for at least 10 years, so it has a reliable track record.
NOC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.12%
Div Incr Years20
Div Non Decr Years33
5.3 Sustainability
49.22% of the earnings are spent on dividend by NOC. This is a bit on the high side, but may be sustainable.
The dividend of NOC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP49.22%
EPS Next 2Y10.24%
EPS Next 3Y8.66%
NORTHROP GRUMMAN CORP
NYSE:NOC (1/21/2025, 8:17:15 PM)
After market: 507.827 +3.38 (+0.67%)504.45
+22.07 (+4.58%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners82.99%
Inst Owner Change0.21%
Ins Owners0.23%
Ins Owner Change-0.1%
Market Cap73.50B
Analysts70.34
Price Target568.53 (12.7%)
Short Float %1.34%
Short Ratio2.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
Yearly Dividend7.36
Dividend Growth(5Y)9.12%
DP49.22%
Div Incr Years20
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.19%
Min EPS beat(2)6.23%
Max EPS beat(2)14.15%
EPS beat(4)4
Avg EPS beat(4)8.84%
Min EPS beat(4)6.23%
Max EPS beat(4)14.15%
EPS beat(8)7
Avg EPS beat(8)7.49%
EPS beat(12)9
Avg EPS beat(12)5%
EPS beat(16)13
Avg EPS beat(16)6.9%
Revenue beat(2)1
Avg Revenue beat(2)-0.9%
Min Revenue beat(2)-2.79%
Max Revenue beat(2)0.99%
Revenue beat(4)3
Avg Revenue beat(4)0.44%
Min Revenue beat(4)-2.79%
Max Revenue beat(4)2.68%
Revenue beat(8)7
Avg Revenue beat(8)0.92%
Revenue beat(12)7
Avg Revenue beat(12)-0.51%
Revenue beat(16)10
Avg Revenue beat(16)0.57%
PT rev (1m)-1.08%
PT rev (3m)5.83%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.57%
EPS NY rev (1m)0%
EPS NY rev (3m)3.36%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.32%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.44 | ||
| Fwd PE | 17.82 | ||
| P/S | 1.79 | ||
| P/FCF | 29.56 | ||
| P/OCF | 17.33 | ||
| P/B | 4.98 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.37 |
EPS(TTM)25.95
EY5.14%
EPS(NY)28.3
Fwd EY5.61%
FCF(TTM)17.06
FCFY3.38%
OCF(TTM)29.1
OCFY5.77%
SpS281.3
BVpS101.22
TBVpS-20.84
PEG (NY)1.52
PEG (5Y)4.52
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.92% | ||
| ROE | 16.1% | ||
| ROCE | 8.21% | ||
| ROIC | 7.04% | ||
| ROICexc | 7.77% | ||
| ROICexgc | 17.6% | ||
| OM | 7.05% | ||
| PM (TTM) | 5.79% | ||
| GM | 16.87% | ||
| FCFM | 6.07% |
ROA(3y)10.69%
ROA(5y)8.94%
ROE(3y)33.35%
ROE(5y)31.14%
ROIC(3y)8.47%
ROIC(5y)9.23%
ROICexc(3y)9.34%
ROICexc(5y)10.24%
ROICexgc(3y)23.3%
ROICexgc(5y)26.99%
ROCE(3y)9.88%
ROCE(5y)10.76%
ROICexcg growth 3Y-18.91%
ROICexcg growth 5Y-17.56%
ROICexc growth 3Y-15.93%
ROICexc growth 5Y-9.94%
OM growth 3Y-16.39%
OM growth 5Y-12.46%
PM growth 3Y-15.48%
PM growth 5Y-13.38%
GM growth 3Y-6.38%
GM growth 5Y-5.87%
F-Score5
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 6.55 | ||
| Debt/EBITDA | 3.46 | ||
| Cap/Depr | 129.35% | ||
| Cap/Sales | 4.28% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 99.91% | ||
| Profit Quality | 104.67% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 2.82 |
F-Score5
WACC10.03%
ROIC/WACC0.7
Cap/Depr(3y)117.93%
Cap/Depr(5y)118.01%
Cap/Sales(3y)4.14%
Cap/Sales(5y)4%
Profit Quality(3y)54.27%
Profit Quality(5y)77.64%
High Growth Momentum
Growth
EPS 1Y (TTM)5.83%
EPS 3Y-0.95%
EPS 5Y4.3%
EPS Q2Q%13.27%
EPS Next Y12.8%
EPS Next 2Y10.24%
EPS Next 3Y8.66%
EPS Next 5Y8.32%
Revenue 1Y (TTM)5.95%
Revenue growth 3Y2.21%
Revenue growth 5Y5.48%
Sales Q2Q%2.26%
Revenue Next Year5.66%
Revenue Next 2Y4.63%
Revenue Next 3Y4.63%
Revenue Next 5Y4.48%
EBIT growth 1Y-24.71%
EBIT growth 3Y-14.54%
EBIT growth 5Y-7.67%
EBIT Next Year42.17%
EBIT Next 3Y16.36%
EBIT Next 5Y11.65%
FCF growth 1Y347.12%
FCF growth 3Y-10.05%
FCF growth 5Y-4.02%
OCF growth 1Y102.68%
OCF growth 3Y-3.45%
OCF growth 5Y0.25%