NORTHROP GRUMMAN CORP (NOC)
US6668071029 - Common Stock
Overall NOC gets a fundamental rating of 4 out of 10. We evaluated NOC against 65 industry peers in the Aerospace & Defense industry. There are concerns on the financial health of NOC while its profitability can be described as average. NOC has a correct valuation and a medium 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.
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 (4.51%) than 63.08% of its industry peers.
With an excellent Return On Equity value of 15.17%, NOC belongs to the best of the industry, outperforming 81.54% of the companies in the same industry.
NOC has a Return On Invested Capital of 6.58%. This is in the better half of the industry: NOC outperforms 63.08% 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 8.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.51% | ||
| ROE | 15.17% | ||
| ROIC | 6.58% |
ROA(3y)10.69%
ROA(5y)8.94%
ROE(3y)33.35%
ROE(5y)31.14%
ROIC(3y)8.47%
ROIC(5y)9.23%
1.3 Margins
NOC's Profit Margin of 5.38% is in line compared to the rest of the industry. NOC outperforms 58.46% of its industry peers.
In the last couple of years the Profit Margin of NOC has declined.
NOC's Operating Margin of 6.63% is in line compared to the rest of the industry. NOC outperforms 56.92% of its industry peers.
In the last couple of years the Operating Margin of NOC has declined.
NOC's Gross Margin of 16.70% is on the low side compared to the rest of the industry. NOC is outperformed by 67.69% of its industry peers.
In the last couple of years the Gross Margin of NOC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.63% | ||
| PM (TTM) | 5.38% | ||
| GM | 16.7% |
OM growth 3Y-16.39%
OM growth 5Y-12.46%
PM growth 3Y-15.48%
PM growth 5Y-13.38%
GM growth 3Y-6.38%
GM growth 5Y-5.87%
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.
NOC has less shares outstanding than it did 5 years ago.
NOC has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.72 indicates that NOC is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.72, NOC is in line with its industry, outperforming 53.85% of the companies in the same industry.
The Debt to FCF ratio of NOC is 7.65, which is on the high side as it means it would take NOC, 7.65 years of fcf income to pay off all of its debts.
NOC's Debt to FCF ratio of 7.65 is fine compared to the rest of the industry. NOC outperforms 63.08% of its industry peers.
A Debt/Equity ratio of 1.04 is on the high side and indicates that NOC has dependencies on debt financing.
NOC's Debt to Equity ratio of 1.04 is on the low side compared to the rest of the industry. NOC is outperformed by 73.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.04 | ||
| Debt/FCF | 7.65 | ||
| Altman-Z | 2.72 |
ROIC/WACC0.74
WACC8.85%
2.3 Liquidity
NOC has a Current Ratio of 1.13. This is a normal value and indicates that NOC is financially healthy and should not expect problems in meeting its short term obligations.
NOC has a worse Current ratio (1.13) than 72.31% of its industry peers.
A Quick Ratio of 1.02 indicates that NOC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.02, NOC is doing worse than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
NOC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.63%.
Measured over the past 5 years, NOC shows a small growth in Earnings Per Share. The EPS has been growing by 4.30% on average per year.
Looking at the last year, NOC shows a quite strong growth in Revenue. The Revenue has grown by 8.13% in the last year.
Measured over the past years, NOC shows a small growth in Revenue. The Revenue has been growing by 5.48% on average per year.
EPS 1Y (TTM)-4.63%
EPS 3Y-0.95%
EPS 5Y4.3%
EPS growth Q2Q14.91%
Revenue 1Y (TTM)8.13%
Revenue growth 3Y2.21%
Revenue growth 5Y5.48%
Revenue growth Q2Q8.95%
3.2 Future
NOC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.04% yearly.
The Revenue is expected to grow by 4.88% on average over the next years.
EPS Next Y6.91%
EPS Next 2Y9.42%
EPS Next 3Y8.5%
EPS Next 5Y8.04%
Revenue Next Year5.1%
Revenue Next 2Y5.22%
Revenue Next 3Y5.28%
Revenue Next 5Y4.88%
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
With a Price/Earnings ratio of 19.50, NOC is valued on the expensive side.
81.54% of the companies in the same industry are more expensive than NOC, based on the Price/Earnings ratio.
NOC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.60.
The Price/Forward Earnings ratio is 16.86, which indicates a correct valuation of NOC.
84.62% of the companies in the same industry are more expensive than NOC, based on the Price/Forward Earnings ratio.
NOC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.5 | ||
| Fwd PE | 16.86 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as NOC.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NOC indicates a somewhat cheap valuation: NOC is cheaper than 76.92% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.59 | ||
| EV/EBITDA | 20.71 |
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.
PEG (NY)2.82
PEG (5Y)4.54
EPS Next 2Y9.42%
EPS Next 3Y8.5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.75%, NOC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.29, NOC pays a better dividend. On top of this NOC pays more dividend than 89.23% of the companies listed in the same industry.
NOC's Dividend Yield is slightly below the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
5.2 History
On average, the dividend of NOC grows each year by 9.12%, 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)9.12%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
NOC pays out 52.32% of its income as dividend. This is a bit on the high side, but may be sustainable.
NOC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP52.32%
EPS Next 2Y9.42%
EPS Next 3Y8.5%
NORTHROP GRUMMAN CORP
NYSE:NOC (5/17/2024, 7:16:23 PM)
After market: 470.22 0 (0%)470.22
-0.47 (-0.1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap69.59B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.5 | ||
| Fwd PE | 16.86 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.82
PEG (5Y)4.54
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.51% | ||
| ROE | 15.17% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 6.63% | ||
| PM (TTM) | 5.38% | ||
| GM | 16.7% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.04 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-4.63%
EPS 3Y-0.95%
EPS 5Y
EPS growth Q2Q
EPS Next Y6.91%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.13%
Revenue growth 3Y2.21%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y