NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
USA - NYSE:NOC - US6668071029 - Common Stock
579.36 USD
+4.82 (+0.84%)
579.36 USD
0 (0%)
Taking everything into account, NOC scores 5 out of 10 in our fundamental rating. NOC was compared to 69 industry peers in the Aerospace & Defense industry. NOC scores excellent on profitability, but there are concerns on its financial health. NOC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year NOC was profitable.
NOC had a positive operating cash flow in the past year.
NOC had positive earnings in each of the past 5 years.
NOC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NOC has a better Return On Assets (7.98%) than 88.41% of its industry peers.
NOC's Return On Equity of 25.50% is amongst the best of the industry. NOC outperforms 95.65% of its industry peers.
NOC has a Return On Invested Capital of 9.44%. This is amongst the best in the industry. NOC outperforms 81.16% of its industry peers.
NOC had an Average Return On Invested Capital over the past 3 years of 8.81%. This is in line with the industry average of 8.22%.
The last Return On Invested Capital (9.44%) for NOC is above the 3 year average (8.81%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.98% | ||
| ROE | 25.5% | ||
| ROIC | 9.44% |
ROA(3y)8.02%
ROA(5y)9.54%
ROE(3y)24.39%
ROE(5y)31.5%
ROIC(3y)8.81%
ROIC(5y)9.17%
1.3 Margins
The Profit Margin of NOC (9.74%) is better than 79.71% of its industry peers.
In the last couple of years the Profit Margin of NOC has grown nicely.
Looking at the Operating Margin, with a value of 9.82%, NOC is in the better half of the industry, outperforming 63.77% of the companies in the same industry.
In the last couple of years the Operating Margin of NOC has declined.
The Gross Margin of NOC (19.33%) is worse than 65.22% of its industry peers.
NOC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.82% | ||
| PM (TTM) | 9.74% | ||
| GM | 19.33% |
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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NOC is destroying value.
Compared to 1 year ago, NOC has less shares outstanding
The number of shares outstanding for NOC has been reduced compared to 5 years ago.
NOC has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.00 indicates that NOC is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.00, NOC is in line with its industry, outperforming 43.48% of the companies in the same industry.
The Debt to FCF ratio of NOC is 12.01, which is on the high side as it means it would take NOC, 12.01 years of fcf income to pay off all of its debts.
NOC's Debt to FCF ratio of 12.01 is in line compared to the rest of the industry. NOC outperforms 55.07% of its industry peers.
NOC has a Debt/Equity ratio of 0.98. This is a neutral value indicating NOC is somewhat dependend on debt financing.
NOC has a worse Debt to Equity ratio (0.98) than 75.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 12.01 | ||
| Altman-Z | 3 |
ROIC/WACC0.98
WACC9.61%
2.3 Liquidity
A Current Ratio of 1.04 indicates that NOC should not have too much problems paying its short term obligations.
NOC's Current ratio of 1.04 is on the low side compared to the rest of the industry. NOC is outperformed by 81.16% of its industry peers.
A Quick Ratio of 0.93 indicates that NOC may have some problems paying its short term obligations.
With a Quick ratio value of 0.93, NOC is not doing good in the industry: 71.01% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.93 |
3. Growth
3.1 Past
NOC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.69%.
The Earnings Per Share has been growing slightly by 4.20% on average over the past years.
The Revenue has decreased by -0.65% in the past year.
The Revenue has been growing slightly by 3.93% on average over the past years.
EPS 1Y (TTM)5.69%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%11.79%
Revenue 1Y (TTM)-0.65%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%1.3%
3.2 Future
The Earnings Per Share is expected to grow by 7.63% on average over the next years.
Based on estimates for the next years, NOC will show a small growth in Revenue. The Revenue will grow by 4.21% on average per year.
EPS Next Y-1.58%
EPS Next 2Y5.71%
EPS Next 3Y6.77%
EPS Next 5Y7.63%
Revenue Next Year2.05%
Revenue Next 2Y3.59%
Revenue Next 3Y4.03%
Revenue Next 5Y4.21%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
The Price/Earnings ratio is 21.81, which indicates a rather expensive current valuation of NOC.
NOC's Price/Earnings ratio is rather cheap when compared to the industry. NOC is cheaper than 88.41% of the companies in the same industry.
NOC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.20, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 19.89, which indicates a rather expensive current valuation of NOC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NOC indicates a rather cheap valuation: NOC is cheaper than 81.16% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.71, NOC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.81 | ||
| Fwd PE | 19.89 |
4.2 Price Multiples
NOC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NOC is cheaper than 68.12% of the companies in the same industry.
NOC's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 63.42 | ||
| EV/EBITDA | 17.89 |
4.3 Compensation for Growth
NOC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)5.19
EPS Next 2Y5.71%
EPS Next 3Y6.77%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.59%, NOC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.47, NOC pays a better dividend. On top of this NOC pays more dividend than 89.86% of the companies listed in the same industry.
NOC's Dividend Yield is slightly below the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.59% |
5.2 History
On average, the dividend of NOC grows each year by 9.14%, which is quite nice.
NOC has paid a dividend for at least 10 years, which is 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
5.3 Sustainability
NOC pays out 31.28% 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.
DP31.28%
EPS Next 2Y5.71%
EPS Next 3Y6.77%
579.36
+4.82 (+0.84%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners84.46%
Inst Owner Change7.33%
Ins Owners0.21%
Ins Owner Change-0.67%
Market Cap82.95B
Analysts73.33
Price Target615.12 (6.17%)
Short Float %1.22%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.59% |
Yearly Dividend8.04
Dividend Growth(5Y)9.14%
DP31.28%
Div Incr Years21
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.45%
Min EPS beat(2)-4.03%
Max EPS beat(2)3.14%
EPS beat(4)2
Avg EPS beat(4)3.24%
Min EPS beat(4)-4.03%
Max EPS beat(4)14.15%
EPS beat(8)6
Avg EPS beat(8)4.94%
EPS beat(12)8
Avg EPS beat(12)4.51%
EPS beat(16)11
Avg EPS beat(16)4.27%
Revenue beat(2)1
Avg Revenue beat(2)-1.83%
Min Revenue beat(2)-5.46%
Max Revenue beat(2)1.8%
Revenue beat(4)1
Avg Revenue beat(4)-2.58%
Min Revenue beat(4)-5.46%
Max Revenue beat(4)1.8%
Revenue beat(8)5
Avg Revenue beat(8)-0.6%
Revenue beat(12)8
Avg Revenue beat(12)-0.24%
Revenue beat(16)8
Avg Revenue beat(16)-1.07%
PT rev (1m)0.5%
PT rev (3m)11.04%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-15.16%
EPS NY rev (1m)0.81%
EPS NY rev (3m)0.75%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.5%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.81 | ||
| Fwd PE | 19.89 | ||
| P/S | 2.05 | ||
| P/FCF | 63.42 | ||
| P/OCF | 27.91 | ||
| P/B | 5.36 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.89 |
EPS(TTM)26.56
EY4.58%
EPS(NY)29.13
Fwd EY5.03%
FCF(TTM)9.14
FCFY1.58%
OCF(TTM)20.76
OCFY3.58%
SpS282.87
BVpS108.05
TBVpS-15.33
PEG (NY)N/A
PEG (5Y)5.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.98% | ||
| ROE | 25.5% | ||
| ROCE | 11.05% | ||
| ROIC | 9.44% | ||
| ROICexc | 9.96% | ||
| ROICexgc | 20.68% | ||
| OM | 9.82% | ||
| PM (TTM) | 9.74% | ||
| GM | 19.33% | ||
| FCFM | 3.23% |
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 Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 12.01 | ||
| Debt/EBITDA | 2.8 | ||
| Cap/Depr | 116.2% | ||
| Cap/Sales | 4.11% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 54.96% | ||
| Profit Quality | 33.16% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.93 | ||
| Altman-Z | 3 |
F-Score6
WACC9.61%
ROIC/WACC0.98
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)5.69%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%11.79%
EPS Next Y-1.58%
EPS Next 2Y5.71%
EPS Next 3Y6.77%
EPS Next 5Y7.63%
Revenue 1Y (TTM)-0.65%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%1.3%
Revenue Next Year2.05%
Revenue Next 2Y3.59%
Revenue Next 3Y4.03%
Revenue Next 5Y4.21%
EBIT growth 1Y42.82%
EBIT growth 3Y5.98%
EBIT growth 5Y1.94%
EBIT Next Year31.68%
EBIT Next 3Y14.91%
EBIT Next 5Y12.37%
FCF growth 1Y-42.18%
FCF growth 3Y6.79%
FCF growth 5Y-2.88%
OCF growth 1Y-21.85%
OCF growth 3Y7.15%
OCF growth 5Y0.42%