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NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis

NYSE:NOC - New York Stock Exchange, Inc. - US6668071029 - Common Stock - Currency: USD

514.6  +0.73 (+0.14%)

After market: 514.6 0 (0%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to NOC. NOC was compared to 65 industry peers in the Aerospace & Defense industry. While NOC has a great profitability rating, there are quite some concerns on its financial health. NOC has a decent growth rate and is not valued too expensively.


Dividend Valuation Growth Profitability Health

7

1. Profitability

1.1 Basic Checks

NOC had positive earnings in the past year.
In the past year NOC had a positive cash flow from operations.
In the past 5 years NOC has always been profitable.
In the past 5 years NOC always reported a positive cash flow from operatings.
NOC Yearly Net Income VS EBIT VS OCF VS FCFNOC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B

1.2 Ratios

The Return On Assets of NOC (7.66%) is better than 84.62% of its industry peers.
With an excellent Return On Equity value of 24.77%, NOC belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
With a decent Return On Invested Capital value of 9.59%, NOC is doing good in the industry, outperforming 80.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NOC is in line with the industry average of 8.44%.
The 3 year average ROIC (8.81%) for NOC is below the current ROIC(9.59%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 7.66%
ROE 24.77%
ROIC 9.59%
ROA(3y)8.02%
ROA(5y)9.54%
ROE(3y)24.39%
ROE(5y)31.5%
ROIC(3y)8.81%
ROIC(5y)9.17%
NOC Yearly ROA, ROE, ROICNOC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40 50

1.3 Margins

The Profit Margin of NOC (9.19%) is better than 78.46% of its industry peers.
NOC's Profit Margin has improved in the last couple of years.
NOC has a Operating Margin of 9.59%. This is in the better half of the industry: NOC outperforms 64.62% of its industry peers.
In the last couple of years the Operating Margin of NOC has declined.
With a Gross Margin value of 19.34%, NOC is not doing good in the industry: 66.15% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of NOC has remained more or less at the same level.
Industry RankSector Rank
OM 9.59%
PM (TTM) 9.19%
GM 19.34%
OM growth 3Y1.14%
OM growth 5Y-1.91%
PM growth 3Y-19.69%
PM growth 5Y8.9%
GM growth 3Y0%
GM growth 5Y-1.02%
NOC Yearly Profit, Operating, Gross MarginsNOC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15 20

3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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
The debt/assets ratio for NOC is higher compared to a year ago.
NOC Yearly Shares OutstandingNOC Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M
NOC Yearly Total Debt VS Total AssetsNOC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B 40B

2.2 Solvency

An Altman-Z score of 2.84 indicates that NOC is not a great score, but indicates only limited risk for bankruptcy at the moment.
NOC has a Altman-Z score of 2.84. This is comparable to the rest of the industry: NOC outperforms 46.15% of its industry peers.
The Debt to FCF ratio of NOC is 8.32, which is on the high side as it means it would take NOC, 8.32 years of fcf income to pay off all of its debts.
NOC's Debt to FCF ratio of 8.32 is fine compared to the rest of the industry. NOC outperforms 61.54% of its industry peers.
NOC has a Debt/Equity ratio of 0.95. This is a neutral value indicating NOC is somewhat dependend on debt financing.
The Debt to Equity ratio of NOC (0.95) is worse than 70.77% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.95
Debt/FCF 8.32
Altman-Z 2.84
ROIC/WACC0.94
WACC10.21%
NOC Yearly LT Debt VS Equity VS FCFNOC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B

2.3 Liquidity

NOC has a Current Ratio of 0.95. This is a bad value and indicates that NOC is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.95, NOC is not doing good in the industry: 89.23% of the companies in the same industry are doing better.
A Quick Ratio of 0.84 indicates that NOC may have some problems paying its short term obligations.
The Quick ratio of NOC (0.84) is worse than 73.85% of its industry peers.
Industry RankSector Rank
Current Ratio 0.95
Quick Ratio 0.84
NOC Yearly Current Assets VS Current LiabilitesNOC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B

4

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 7.05% 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 4.20% on average per year.
The Revenue has been growing slightly by 0.61% in the past year.
NOC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.93% yearly.
EPS 1Y (TTM)7.05%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%-4.11%
Revenue 1Y (TTM)0.61%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%-6.56%

3.2 Future

NOC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.54% yearly.
The Revenue is expected to grow by 4.18% on average over the next years.
EPS Next Y-2.34%
EPS Next 2Y5.41%
EPS Next 3Y6.25%
EPS Next 5Y7.54%
Revenue Next Year1.92%
Revenue Next 2Y3.35%
Revenue Next 3Y3.84%
Revenue Next 5Y4.18%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
NOC Yearly Revenue VS EstimatesNOC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2031 2032 10B 20B 30B 40B 50B
NOC Yearly EPS VS EstimatesNOC Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 10 20 30

5

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 19.94, the valuation of NOC can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of NOC indicates a rather cheap valuation: NOC is cheaper than 90.77% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. NOC is valued slightly cheaper when compared to this.
NOC is valuated rather expensively with a Price/Forward Earnings ratio of 17.76.
Based on the Price/Forward Earnings ratio, NOC is valued cheaper than 87.69% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. NOC is around the same levels.
Industry RankSector Rank
PE 19.94
Fwd PE 17.76
NOC Price Earnings VS Forward Price EarningsNOC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

72.31% of the companies in the same industry are more expensive than NOC, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, NOC is valued a bit cheaper than the industry average as 73.85% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 41.7
EV/EBITDA 16.49
NOC Per share dataNOC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 50 100 150 200 250

4.3 Compensation for Growth

The decent profitability rating of NOC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.74
EPS Next 2Y5.41%
EPS Next 3Y6.25%

6

5. Dividend

5.1 Amount

NOC has a Yearly Dividend Yield of 1.83%.
NOC's Dividend Yield is rather good when compared to the industry average which is at 1.24. NOC pays more dividend than 89.23% of the companies in the same industry.
NOC's Dividend Yield is slightly below the S&P500 average, which is at 2.37.
Industry RankSector Rank
Dividend Yield 1.83%

5.2 History

On average, the dividend of NOC grows each year by 9.14%, 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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.14%
Div Incr Years21
Div Non Decr Years34
NOC Yearly Dividends per shareNOC Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6 8

5.3 Sustainability

NOC pays out 32.47% of its income as dividend. This is a sustainable payout ratio.
The dividend of NOC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP32.47%
EPS Next 2Y5.41%
EPS Next 3Y6.25%
NOC Yearly Income VS Free CF VS DividendNOC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B
NOC Dividend Payout.NOC Dividend Payout, showing the Payout Ratio.NOC Dividend Payout.PayoutRetained Earnings

NORTHROP GRUMMAN CORP

NYSE:NOC (7/11/2025, 8:04:01 PM)

After market: 514.6 0 (0%)

514.6

+0.73 (+0.14%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)04-22 2025-04-22/bmo
Earnings (Next)07-22 2025-07-22/bmo
Inst Owners84.17%
Inst Owner Change0%
Ins Owners0.22%
Ins Owner Change0.99%
Market Cap74.07B
Analysts75
Price Target558.17 (8.47%)
Short Float %1.67%
Short Ratio2.23
Dividend
Industry RankSector Rank
Dividend Yield 1.83%
Yearly Dividend8.04
Dividend Growth(5Y)9.14%
DP32.47%
Div Incr Years21
Div Non Decr Years34
Ex-Date06-02 2025-06-02 (2.31)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.17%
Min EPS beat(2)-4.03%
Max EPS beat(2)-0.3%
EPS beat(4)2
Avg EPS beat(4)4.01%
Min EPS beat(4)-4.03%
Max EPS beat(4)14.15%
EPS beat(8)5
Avg EPS beat(8)4.46%
EPS beat(12)8
Avg EPS beat(12)4.56%
EPS beat(16)11
Avg EPS beat(16)4.63%
Revenue beat(2)0
Avg Revenue beat(2)-4.67%
Min Revenue beat(2)-5.46%
Max Revenue beat(2)-3.89%
Revenue beat(4)1
Avg Revenue beat(4)-2.79%
Min Revenue beat(4)-5.46%
Max Revenue beat(4)0.99%
Revenue beat(8)5
Avg Revenue beat(8)-0.65%
Revenue beat(12)7
Avg Revenue beat(12)-0.72%
Revenue beat(16)8
Avg Revenue beat(16)-0.97%
PT rev (1m)0.81%
PT rev (3m)-0.5%
EPS NQ rev (1m)1.29%
EPS NQ rev (3m)-6.73%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-10.28%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-2.94%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-0.53%
Valuation
Industry RankSector Rank
PE 19.94
Fwd PE 17.76
P/S 1.83
P/FCF 41.7
P/OCF 20.99
P/B 4.94
P/tB N/A
EV/EBITDA 16.49
EPS(TTM)25.81
EY5.02%
EPS(NY)28.97
Fwd EY5.63%
FCF(TTM)12.34
FCFY2.4%
OCF(TTM)24.52
OCFY4.76%
SpS280.47
BVpS104.11
TBVpS-18.7
PEG (NY)N/A
PEG (5Y)4.74
Profitability
Industry RankSector Rank
ROA 7.66%
ROE 24.77%
ROCE 11.22%
ROIC 9.59%
ROICexc 10.08%
ROICexgc 21.85%
OM 9.59%
PM (TTM) 9.19%
GM 19.34%
FCFM 4.4%
ROA(3y)8.02%
ROA(5y)9.54%
ROE(3y)24.39%
ROE(5y)31.5%
ROIC(3y)8.81%
ROIC(5y)9.17%
ROICexc(3y)9.79%
ROICexc(5y)10.31%
ROICexgc(3y)23.55%
ROICexgc(5y)25.56%
ROCE(3y)10.31%
ROCE(5y)10.74%
ROICexcg growth 3Y1.23%
ROICexcg growth 5Y-4.1%
ROICexc growth 3Y4.4%
ROICexc growth 5Y0.96%
OM growth 3Y1.14%
OM growth 5Y-1.91%
PM growth 3Y-19.69%
PM growth 5Y8.9%
GM growth 3Y0%
GM growth 5Y-1.02%
F-Score6
Asset Turnover0.83
Health
Industry RankSector Rank
Debt/Equity 0.95
Debt/FCF 8.32
Debt/EBITDA 2.68
Cap/Depr 124.5%
Cap/Sales 4.34%
Interest Coverage 250
Cash Conversion 66.84%
Profit Quality 47.86%
Current Ratio 0.95
Quick Ratio 0.84
Altman-Z 2.84
F-Score6
WACC10.21%
ROIC/WACC0.94
Cap/Depr(3y)122.86%
Cap/Depr(5y)118.97%
Cap/Sales(3y)4.25%
Cap/Sales(5y)4.11%
Profit Quality(3y)64.96%
Profit Quality(5y)63.21%
High Growth Momentum
Growth
EPS 1Y (TTM)7.05%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%-4.11%
EPS Next Y-2.34%
EPS Next 2Y5.41%
EPS Next 3Y6.25%
EPS Next 5Y7.54%
Revenue 1Y (TTM)0.61%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%-6.56%
Revenue Next Year1.92%
Revenue Next 2Y3.35%
Revenue Next 3Y3.84%
Revenue Next 5Y4.18%
EBIT growth 1Y45.51%
EBIT growth 3Y5.98%
EBIT growth 5Y1.94%
EBIT Next Year30.83%
EBIT Next 3Y14.76%
EBIT Next 5Y12.37%
FCF growth 1Y49.62%
FCF growth 3Y6.79%
FCF growth 5Y-2.88%
OCF growth 1Y31.34%
OCF growth 3Y7.15%
OCF growth 5Y0.42%