NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
NYSE:NOC - New York Stock Exchange, Inc. - US6668071029 - Common Stock - Currency: USD
Overall NOC gets a fundamental rating of 5 out of 10. We evaluated NOC against 65 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 has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years NOC has been profitable.
In the past 5 years NOC always reported a positive cash flow from operatings.
1.2 Ratios
NOC has a Return On Assets of 8.46%. This is amongst the best in the industry. NOC outperforms 82.81% of its industry peers.
NOC has a Return On Equity of 27.30%. This is amongst the best in the industry. NOC outperforms 95.31% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.60%, NOC belongs to the top of the industry, outperforming 89.06% 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 7.98%.
The last Return On Invested Capital (10.60%) for NOC is above the 3 year average (8.81%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.46% | ||
| ROE | 27.3% | ||
| ROIC | 10.6% |
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
With a decent Profit Margin value of 10.17%, NOC is doing good in the industry, outperforming 75.00% of the companies in the same industry.
NOC's Profit Margin has improved in the last couple of years.
NOC's Operating Margin of 10.65% is fine compared to the rest of the industry. NOC outperforms 71.88% 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 20.38%, NOC is in line with its industry, outperforming 40.63% 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 | 10.65% | ||
| PM (TTM) | 10.17% | ||
| GM | 20.38% |
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
NOC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, NOC has less shares outstanding
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
An Altman-Z score of 2.68 indicates that NOC is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of NOC (2.68) is comparable to the rest of the industry.
NOC has a debt to FCF ratio of 6.21. This is a slightly negative value and a sign of low solvency as NOC would need 6.21 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.21, NOC is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
NOC has a Debt/Equity ratio of 0.96. This is a neutral value indicating NOC is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.96, NOC is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | 6.21 | ||
| Altman-Z | 2.68 |
ROIC/WACC1.16
WACC9.17%
2.3 Liquidity
NOC has a Current Ratio of 1.01. This is a normal value and indicates that NOC is financially healthy and should not expect problems in meeting its short term obligations.
NOC's Current ratio of 1.01 is on the low side compared to the rest of the industry. NOC is outperformed by 82.81% of its industry peers.
A Quick Ratio of 0.91 indicates that NOC may have some problems paying its short term obligations.
NOC has a Quick ratio of 0.91. This is in the lower half of the industry: NOC underperforms 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
NOC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.94%, which is quite good.
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 4.44% in the past year.
Measured over the past years, NOC shows a small growth in Revenue. The Revenue has been growing by 3.93% on average per year.
EPS 1Y (TTM)11.94%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%1.91%
Revenue 1Y (TTM)4.44%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%0.45%
3.2 Future
The Earnings Per Share is expected to grow by 7.43% on average over the next years.
NOC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.19% yearly.
EPS Next Y9%
EPS Next 2Y6%
EPS Next 3Y6.54%
EPS Next 5Y7.43%
Revenue Next Year2.86%
Revenue Next 2Y3.6%
Revenue Next 3Y3.92%
Revenue Next 5Y4.19%
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
Based on the Price/Earnings ratio of 17.18, the valuation of NOC can be described as rather expensive.
87.50% of the companies in the same industry are more expensive than NOC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 29.63, NOC is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 15.76, the valuation of NOC can be described as correct.
Based on the Price/Forward Earnings ratio, NOC is valued cheaply inside the industry as 92.19% of the companies are valued more expensively.
NOC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.18 | ||
| Fwd PE | 15.76 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NOC is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, NOC is valued cheaper than 92.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.74 | ||
| EV/EBITDA | 13.13 |
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)1.91
PEG (5Y)4.09
EPS Next 2Y6%
EPS Next 3Y6.54%
5. Dividend
5.1 Amount
NOC has a Yearly Dividend Yield of 1.81%.
NOC's Dividend Yield is rather good when compared to the industry average which is at 1.45. NOC pays more dividend than 89.06% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.29, NOC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.14%
Div Incr Years20
Div Non Decr Years33
5.3 Sustainability
28.41% of the earnings are spent on dividend by NOC. This is a low number and sustainable payout ratio.
NOC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.41%
EPS Next 2Y6%
EPS Next 3Y6.54%
447.96
+9.85 (+2.25%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners82.99%
Inst Owner Change-0.35%
Ins Owners0.23%
Ins Owner Change-0.09%
Market Cap64.85B
Analysts72.41
Price Target558.18 (24.6%)
Short Float %1.36%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
Yearly Dividend8.04
Dividend Growth(5Y)9.14%
DP28.41%
Div Incr Years20
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.92%
Min EPS beat(2)-0.3%
Max EPS beat(2)14.15%
EPS beat(4)3
Avg EPS beat(4)7.03%
Min EPS beat(4)-0.3%
Max EPS beat(4)14.15%
EPS beat(8)6
Avg EPS beat(8)5.83%
EPS beat(12)9
Avg EPS beat(12)5%
EPS beat(16)12
Avg EPS beat(16)6.05%
Revenue beat(2)0
Avg Revenue beat(2)-3.34%
Min Revenue beat(2)-3.89%
Max Revenue beat(2)-2.79%
Revenue beat(4)2
Avg Revenue beat(4)-0.75%
Min Revenue beat(4)-3.89%
Max Revenue beat(4)2.68%
Revenue beat(8)6
Avg Revenue beat(8)0.08%
Revenue beat(12)7
Avg Revenue beat(12)-0.42%
Revenue beat(16)9
Avg Revenue beat(16)-0.24%
PT rev (1m)-1.82%
PT rev (3m)1.21%
EPS NQ rev (1m)-3.19%
EPS NQ rev (3m)-2.03%
EPS NY rev (1m)0.4%
EPS NY rev (3m)0.27%
Revenue NQ rev (1m)-1.52%
Revenue NQ rev (3m)-3.12%
Revenue NY rev (1m)-0.72%
Revenue NY rev (3m)-0.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.18 | ||
| Fwd PE | 15.76 | ||
| P/S | 1.58 | ||
| P/FCF | 24.74 | ||
| P/OCF | 14.78 | ||
| P/B | 4.24 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.13 |
EPS(TTM)26.07
EY5.82%
EPS(NY)28.42
Fwd EY6.34%
FCF(TTM)18.11
FCFY4.04%
OCF(TTM)30.31
OCFY6.77%
SpS283.46
BVpS105.62
TBVpS-17.1
PEG (NY)1.91
PEG (5Y)4.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.46% | ||
| ROE | 27.3% | ||
| ROCE | 12.4% | ||
| ROIC | 10.6% | ||
| ROICexc | 12.09% | ||
| ROICexgc | 28.47% | ||
| OM | 10.65% | ||
| PM (TTM) | 10.17% | ||
| GM | 20.38% | ||
| FCFM | 6.39% |
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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | 6.21 | ||
| Debt/EBITDA | 2.56 | ||
| Cap/Depr | 128.98% | ||
| Cap/Sales | 4.31% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 76.45% | ||
| Profit Quality | 62.79% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | 2.68 |
F-Score6
WACC9.17%
ROIC/WACC1.16
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)11.94%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%1.91%
EPS Next Y9%
EPS Next 2Y6%
EPS Next 3Y6.54%
EPS Next 5Y7.43%
Revenue 1Y (TTM)4.44%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%0.45%
Revenue Next Year2.86%
Revenue Next 2Y3.6%
Revenue Next 3Y3.92%
Revenue Next 5Y4.19%
EBIT growth 1Y72.25%
EBIT growth 3Y5.98%
EBIT growth 5Y1.94%
EBIT Next Year39.27%
EBIT Next 3Y13.97%
EBIT Next 5Y12.08%
FCF growth 1Y24.81%
FCF growth 3Y6.79%
FCF growth 5Y-2.88%
OCF growth 1Y13.24%
OCF growth 3Y7.15%
OCF growth 5Y0.42%