NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NOC - US6668071029 - Common Stock
585.66 USD
+15.45 (+2.71%)
583.49 USD
-2.17 (-0.37%)
NOC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 71 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. NOC also has an excellent dividend rating.
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.
Each year in the past 5 years NOC has been profitable.
NOC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NOC has a Return On Assets of 8.15%. This is amongst the best in the industry. NOC outperforms 88.73% of its industry peers.
Looking at the Return On Equity, with a value of 25.14%, NOC belongs to the top of the industry, outperforming 92.96% of the companies in the same industry.
NOC has a Return On Invested Capital of 9.57%. This is amongst the best in the industry. NOC outperforms 81.69% 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 8.63%.
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 has a Profit Margin of 9.82%. This is in the better half of the industry: NOC outperforms 78.87% of its industry peers.
NOC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 10.01%, NOC is in the better half of the industry, outperforming 60.56% of the companies in the same industry.
NOC's Operating Margin has declined in the last couple of years.
The Gross Margin of NOC (19.42%) is worse than 64.79% of its industry peers.
NOC's Gross Margin has been stable in the last couple of years.
| 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) below the Cost of Capital (WACC), NOC is destroying 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
NOC has an Altman-Z score of 3.10. This indicates that NOC is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of NOC (3.10) 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.
With a Debt to FCF ratio value of 8.56, NOC perfoms like the industry average, outperforming 54.93% of the companies in the same industry.
NOC has a Debt/Equity ratio of 0.95. This is a neutral value indicating NOC is somewhat dependend on debt financing.
NOC's Debt to Equity ratio of 0.95 is on the low side compared to the rest of the industry. NOC is outperformed by 74.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 8.56 | ||
| Altman-Z | 3.1 |
ROIC/WACC0.96
WACC10.02%
2.3 Liquidity
A Current Ratio of 1.11 indicates that NOC should not have too much problems paying its short term obligations.
NOC's Current ratio of 1.11 is on the low side compared to the rest of the industry. NOC is outperformed by 85.92% of its industry peers.
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 73.24% 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.
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)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
The Earnings Per Share is expected to grow by 7.69% 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 4.28% yearly.
EPS Next Y0.91%
EPS Next 2Y5.77%
EPS Next 3Y6.79%
EPS Next 5Y7.69%
Revenue Next Year1.33%
Revenue Next 2Y3.47%
Revenue Next 3Y4.1%
Revenue Next 5Y4.28%
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
A Price/Earnings ratio of 21.51 indicates a rather expensive valuation of NOC.
Compared to the rest of the industry, the Price/Earnings ratio of NOC indicates a rather cheap valuation: NOC is cheaper than 91.55% of the companies listed in the same industry.
NOC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.08 indicates a rather expensive valuation of NOC.
NOC's Price/Forward Earnings ratio is rather cheap when compared to the industry. NOC is cheaper than 90.14% of the companies in the same industry.
NOC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.23, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.51 | ||
| Fwd PE | 20.08 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NOC is valued cheaper than 81.69% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NOC indicates a somewhat cheap valuation: NOC is cheaper than 67.61% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.58 | ||
| EV/EBITDA | 17.45 |
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.
The decent profitability rating of NOC may justify a higher PE ratio.
PEG (NY)23.63
PEG (5Y)5.12
EPS Next 2Y5.77%
EPS Next 3Y6.79%
5. Dividend
5.1 Amount
NOC has a Yearly Dividend Yield of 1.62%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 0.39, NOC pays a better dividend. On top of this NOC pays more dividend than 91.55% of the companies listed in the same industry.
NOC's Dividend Yield is comparable with the S&P500 average which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.62% |
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 Years21
Div Non Decr Years34
5.3 Sustainability
NOC pays out 31.43% of its income as dividend. This is a sustainable payout ratio.
NOC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP31.43%
EPS Next 2Y5.77%
EPS Next 3Y6.79%
585.66
+15.45 (+2.71%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners83.48%
Inst Owner Change0%
Ins Owners0.21%
Ins Owner Change-0.05%
Market Cap83.59B
Revenue(TTM)40.93B
Net Income(TTM)4.02B
Analysts74.81
Price Target676.91 (15.58%)
Short Float %1.08%
Short Ratio2.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.62% |
Yearly Dividend8.04
Dividend Growth(5Y)9.14%
DP31.43%
Div Incr Years21
Div Non Decr Years34
Ex-DateN/A
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)1.05%
PT rev (3m)9.78%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)-7.7%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)2.53%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)-0.31%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.51 | ||
| Fwd PE | 20.08 | ||
| P/S | 2.04 | ||
| P/FCF | 45.58 | ||
| P/OCF | 24.31 | ||
| P/B | 5.23 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.45 |
EPS(TTM)27.23
EY4.65%
EPS(NY)29.17
Fwd EY4.98%
FCF(TTM)12.85
FCFY2.19%
OCF(TTM)24.09
OCFY4.11%
SpS286.77
BVpS112.02
TBVpS-11.69
PEG (NY)23.63
PEG (5Y)5.12
Graham Number261.98
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 | 3.1 |
F-Score6
WACC10.02%
ROIC/WACC0.96
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 Y0.91%
EPS Next 2Y5.77%
EPS Next 3Y6.79%
EPS Next 5Y7.69%
Revenue 1Y (TTM)-0.14%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%4.27%
Revenue Next Year1.33%
Revenue Next 2Y3.47%
Revenue Next 3Y4.1%
Revenue Next 5Y4.28%
EBIT growth 1Y41.9%
EBIT growth 3Y5.98%
EBIT growth 5Y1.94%
EBIT Next Year33.48%
EBIT Next 3Y15.42%
EBIT Next 5Y10.2%
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%
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 5 / 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 21.51 and the Price/Book (PB) ratio is 5.23.
What is the financial health of NORTHROP GRUMMAN CORP (NOC) stock?
The financial health rating of NORTHROP GRUMMAN CORP (NOC) is 3 / 10.