NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NOC - US6668071029 - Common Stock
678.74 USD
+17.77 (+2.69%)
678.74 USD
0 (0%)
NOC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 73 industry peers in the Aerospace & Defense industry. NOC scores excellent on profitability, but there are concerns on its financial health. NOC has a correct valuation and a medium growth rate.
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.
- NOC had positive earnings in each of the past 5 years.
- In the past 5 years NOC always reported a positive cash flow from operatings.
1.2 Ratios
- NOC's Return On Assets of 8.15% is amongst the best of the industry. NOC outperforms 89.04% of its industry peers.
- The Return On Equity of NOC (25.14%) is better than 93.15% of its industry peers.
- With an excellent Return On Invested Capital value of 9.57%, NOC belongs to the best of the industry, outperforming 82.19% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for NOC is in line with the industry average of 8.56%.
- The last Return On Invested Capital (9.57%) for NOC is above the 3 year average (8.81%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.15% | ||
| ROE | 25.14% | ||
| ROIC | 9.57% |
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
- Looking at the Profit Margin, with a value of 9.82%, NOC is in the better half of the industry, outperforming 79.45% of the companies in the same industry.
- In the last couple of years the Profit Margin of NOC has grown nicely.
- The Operating Margin of NOC (10.01%) is better than 61.64% of its industry peers.
- NOC's Operating Margin has declined in the last couple of years.
- Looking at the Gross Margin, with a value of 19.42%, NOC is doing worse than 63.01% of the companies in the same industry.
- In the last couple of years the Gross Margin of NOC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.01% | ||
| PM (TTM) | 9.82% | ||
| GM | 19.42% |
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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NOC is destroying value.
- NOC has less shares outstanding than it did 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.
2.2 Solvency
- NOC has an Altman-Z score of 3.29. This indicates that NOC is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of NOC (3.29) is comparable to the rest of the industry.
- The Debt to FCF ratio of NOC is 8.56, which is on the high side as it means it would take NOC, 8.56 years of fcf income to pay off all of its debts.
- NOC's Debt to FCF ratio of 8.56 is in line compared to the rest of the industry. NOC outperforms 56.16% of its industry peers.
- A Debt/Equity ratio of 0.95 indicates that NOC is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.95, NOC is doing worse than 73.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 8.56 | ||
| Altman-Z | 3.29 |
ROIC/WACC0.96
WACC9.98%
2.3 Liquidity
- A Current Ratio of 1.11 indicates that NOC should not have too much problems paying its short term obligations.
- NOC has a worse Current ratio (1.11) than 84.93% of its industry peers.
- A Quick Ratio of 0.98 indicates that NOC may have some problems paying its short term obligations.
- The Quick ratio of NOC (0.98) is worse than 72.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
- NOC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.93%.
- The Earnings Per Share has been growing slightly by 4.20% on average over the past years.
- The Revenue has decreased by -0.14% in the past year.
- The Revenue has been growing slightly by 3.93% on average over the past years.
EPS 1Y (TTM)4.93%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%9.57%
Revenue 1Y (TTM)-0.14%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%4.27%
3.2 Future
- Based on estimates for the next years, NOC will show a small growth in Earnings Per Share. The EPS will grow by 7.69% on average per year.
- NOC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.30% yearly.
EPS Next Y0.95%
EPS Next 2Y5.71%
EPS Next 3Y6.92%
EPS Next 5Y7.69%
Revenue Next Year1.34%
Revenue Next 2Y3.48%
Revenue Next 3Y4.15%
Revenue Next 5Y4.3%
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.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 24.93, which indicates a rather expensive current valuation of NOC.
- Based on the Price/Earnings ratio, NOC is valued cheaply inside the industry as 89.04% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 28.87. NOC is around the same levels.
- A Price/Forward Earnings ratio of 23.30 indicates a rather expensive valuation of NOC.
- Based on the Price/Forward Earnings ratio, NOC is valued cheaper than 90.41% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of NOC to the average of the S&P500 Index (25.96), we can say NOC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.93 | ||
| Fwd PE | 23.3 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, NOC is valued a bit cheaper than the industry average as 79.45% of the companies are valued more expensively.
- 68.49% 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 | 52.82 | ||
| EV/EBITDA | 19.37 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NOC does not grow enough to justify the current Price/Earnings ratio.
- NOC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)26.17
PEG (5Y)5.93
EPS Next 2Y5.71%
EPS Next 3Y6.92%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.38%, NOC has a reasonable but not impressive dividend return.
- NOC's Dividend Yield is rather good when compared to the industry average which is at 0.34. NOC pays more dividend than 93.15% of the companies in the same industry.
- Compared to the average S&P500 Dividend Yield of 1.82, NOC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.38% |
5.2 History
- The dividend of NOC is nicely growing with an annual growth rate of 9.14%!
- NOC has paid a dividend for at least 10 years, which is 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)9.14%
Div Incr Years21
Div Non Decr Years34
5.3 Sustainability
- 31.43% of the earnings are spent on dividend by NOC. This is a low number and sustainable payout ratio.
- The dividend of NOC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP31.43%
EPS Next 2Y5.71%
EPS Next 3Y6.92%
NORTHROP GRUMMAN CORP / NOC FAQ
What is the fundamental rating for NOC stock?
ChartMill assigns a fundamental rating of 5 / 10 to NOC.
What is the valuation status of NORTHROP GRUMMAN CORP (NOC) stock?
ChartMill assigns a valuation rating of 4 / 10 to NORTHROP GRUMMAN CORP (NOC). This can be considered as Fairly Valued.
Can you provide the profitability details for NORTHROP GRUMMAN CORP?
NORTHROP GRUMMAN CORP (NOC) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for NOC stock?
The Price/Earnings (PE) ratio for NORTHROP GRUMMAN CORP (NOC) is 24.93 and the Price/Book (PB) ratio is 6.06.
What is the financial health of NORTHROP GRUMMAN CORP (NOC) stock?
The financial health rating of NORTHROP GRUMMAN CORP (NOC) is 3 / 10.