NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
USA - NYSE:NOC - US6668071029 - Common Stock
605.74 USD
+9.26 (+1.55%)
605.74 USD
0 (0%)
Taking everything into account, NOC scores 5 out of 10 in our fundamental rating. NOC was compared to 70 industry peers in the Aerospace & Defense industry. While NOC belongs to the best of the industry regarding profitability, 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.
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.
1.2 Ratios
With an excellent Return On Assets value of 8.15%, NOC belongs to the best of the industry, outperforming 87.14% of the companies in the same industry.
NOC's Return On Equity of 25.14% is amongst the best of the industry. NOC outperforms 94.29% of its industry peers.
The Return On Invested Capital of NOC (9.57%) is better than 80.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NOC is in line with the industry average of 8.41%.
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
NOC's Profit Margin of 9.82% is fine compared to the rest of the industry. NOC outperforms 78.57% of its industry peers.
NOC's Profit Margin has improved in the last couple of years.
The Operating Margin of NOC (10.01%) is better than 62.86% of its industry peers.
NOC's Operating Margin has declined in the last couple of years.
NOC has a Gross Margin of 19.42%. This is in the lower half of the industry: NOC underperforms 64.29% of its industry peers.
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), NOC is creating some value.
The number of shares outstanding for NOC has been reduced compared to 1 year ago.
The number of shares outstanding for NOC has been reduced compared to 5 years ago.
Compared to 1 year ago, NOC has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.15 indicates that NOC is not in any danger for bankruptcy at the moment.
NOC has a Altman-Z score (3.15) which is in line with its industry peers.
NOC has a debt to FCF ratio of 8.56. This is a slightly negative value and a sign of low solvency as NOC would need 8.56 years to pay back of all of its debts.
NOC has a Debt to FCF ratio (8.56) which is in line with 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 74.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 8.56 | ||
| Altman-Z | 3.15 |
ROIC/WACC1.03
WACC9.3%
2.3 Liquidity
NOC has a Current Ratio of 1.11. This is a normal value and indicates that NOC is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.11, NOC is not doing good in the industry: 81.43% of the companies in the same industry are doing better.
NOC has a Quick Ratio of 1.11. This is a bad value and indicates that NOC is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of NOC (0.98) is worse than 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.93% over the past year.
NOC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.20% yearly.
Looking at the last year, NOC shows a decrease in Revenue. The Revenue has decreased by -0.14% in the last 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 7.63% on average per year.
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 2Y5.66%
EPS Next 3Y6.68%
EPS Next 5Y7.63%
Revenue Next Year2.12%
Revenue Next 2Y3.58%
Revenue Next 3Y4.03%
Revenue Next 5Y4.21%
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
The Price/Earnings ratio is 22.25, 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 90.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.67. NOC is around the same levels.
With a Price/Forward Earnings ratio of 20.81, NOC is valued on the expensive side.
82.86% of the companies in the same industry are more expensive than NOC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.33, NOC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.25 | ||
| Fwd PE | 20.81 |
4.2 Price Multiples
74.29% of the companies in the same industry are more expensive than NOC, based on the Enterprise Value to EBITDA ratio.
NOC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NOC is cheaper than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.29 | ||
| EV/EBITDA | 18.01 |
4.3 Compensation for Growth
The decent profitability rating of NOC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)5.29
EPS Next 2Y5.66%
EPS Next 3Y6.68%
5. Dividend
5.1 Amount
NOC has a Yearly Dividend Yield of 1.55%.
NOC's Dividend Yield is rather good when compared to the industry average which is at 1.15. NOC pays more dividend than 91.43% of the companies in the same industry.
NOC's Dividend Yield is slightly below the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
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 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 2Y5.66%
EPS Next 3Y6.68%
605.74
+9.26 (+1.55%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners85.04%
Inst Owner Change0%
Ins Owners0.21%
Ins Owner Change-0.66%
Market Cap86.73B
Revenue(TTM)40.93B
Net Income(TTM)4.02B
Analysts73.85
Price Target616.58 (1.79%)
Short Float %1.1%
Short Ratio2.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
Yearly Dividend8.04
Dividend Growth(5Y)9.14%
DP31.43%
Div Incr Years21
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.39%
Min EPS beat(2)3.14%
Max EPS beat(2)17.64%
EPS beat(4)2
Avg EPS beat(4)4.11%
Min EPS beat(4)-4.03%
Max EPS beat(4)17.64%
EPS beat(8)6
Avg EPS beat(8)6.48%
EPS beat(12)9
Avg EPS beat(12)6.36%
EPS beat(16)11
Avg EPS beat(16)4.78%
Revenue beat(2)1
Avg Revenue beat(2)-0.94%
Min Revenue beat(2)-3.68%
Max Revenue beat(2)1.8%
Revenue beat(4)1
Avg Revenue beat(4)-2.81%
Min Revenue beat(4)-5.46%
Max Revenue beat(4)1.8%
Revenue beat(8)4
Avg Revenue beat(8)-1.19%
Revenue beat(12)8
Avg Revenue beat(12)-0.32%
Revenue beat(16)8
Avg Revenue beat(16)-1.08%
PT rev (1m)0.24%
PT rev (3m)10.05%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)-12.42%
EPS NY rev (1m)0%
EPS NY rev (3m)0.81%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)-0.32%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.25 | ||
| Fwd PE | 20.81 | ||
| P/S | 2.12 | ||
| P/FCF | 47.29 | ||
| P/OCF | 25.23 | ||
| P/B | 5.42 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.01 |
EPS(TTM)27.23
EY4.5%
EPS(NY)29.11
Fwd EY4.81%
FCF(TTM)12.81
FCFY2.11%
OCF(TTM)24.01
OCFY3.96%
SpS285.85
BVpS111.66
TBVpS-11.65
PEG (NY)N/A
PEG (5Y)5.29
Graham Number261.56
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.15% | ||
| ROE | 25.14% | ||
| ROCE | 11.2% | ||
| ROIC | 9.57% | ||
| ROICexc | 10.11% | ||
| ROICexgc | 20.63% | ||
| OM | 10.01% | ||
| PM (TTM) | 9.82% | ||
| GM | 19.42% | ||
| FCFM | 4.48% |
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%
ROICexgc growth 3Y1.23%
ROICexgc 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 8.56 | ||
| Debt/EBITDA | 2.72 | ||
| Cap/Depr | 108.38% | ||
| Cap/Sales | 3.92% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 61.64% | ||
| Profit Quality | 45.63% | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.98 | ||
| Altman-Z | 3.15 |
F-Score6
WACC9.3%
ROIC/WACC1.03
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)4.93%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%9.57%
EPS Next Y-1.58%
EPS Next 2Y5.66%
EPS Next 3Y6.68%
EPS Next 5Y7.63%
Revenue 1Y (TTM)-0.14%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%4.27%
Revenue Next Year2.12%
Revenue Next 2Y3.58%
Revenue Next 3Y4.03%
Revenue Next 5Y4.21%
EBIT growth 1Y41.9%
EBIT growth 3Y5.98%
EBIT growth 5Y1.94%
EBIT Next Year31.68%
EBIT Next 3Y14.91%
EBIT Next 5Y10.44%
FCF growth 1Y-12.33%
FCF growth 3Y6.79%
FCF growth 5Y-2.88%
OCF growth 1Y-6.98%
OCF growth 3Y7.15%
OCF growth 5Y0.42%