NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
USA - NYSE:NOC - US6668071029 - Common Stock
609.54 USD
+4.53 (+0.75%)
609.54 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to NOC. NOC was compared to 69 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
In the past year NOC was profitable.
NOC had a positive operating cash flow in the past year.
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 (7.98%) than 88.41% of its industry peers.
NOC has a Return On Equity of 25.50%. This is amongst the best in the industry. NOC outperforms 95.65% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.44%, NOC belongs to the top of the industry, outperforming 81.16% 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 8.29%.
The 3 year average ROIC (8.81%) for NOC is below the current ROIC(9.44%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.98% | ||
| ROE | 25.5% | ||
| ROIC | 9.44% |
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 9.74% is fine compared to the rest of the industry. NOC outperforms 79.71% of its industry peers.
NOC's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 9.82%, NOC is doing good in the industry, outperforming 63.77% of the companies in the same industry.
NOC's Operating Margin has declined in the last couple of years.
NOC has a worse Gross Margin (19.33%) than 65.22% 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 | 9.82% | ||
| PM (TTM) | 9.74% | ||
| GM | 19.33% |
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.
The number of shares outstanding for NOC has been reduced compared to 1 year ago.
NOC has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, NOC has a worse debt to assets ratio.
2.2 Solvency
NOC has an Altman-Z score of 3.07. This indicates that NOC is financially healthy and has little risk of bankruptcy at the moment.
With a Altman-Z score value of 3.07, NOC perfoms like the industry average, outperforming 43.48% of the companies in the same industry.
NOC has a debt to FCF ratio of 12.01. This is a negative value and a sign of low solvency as NOC would need 12.01 years to pay back of all of its debts.
With a Debt to FCF ratio value of 12.01, NOC perfoms like the industry average, outperforming 55.07% of the companies in the same industry.
NOC has a Debt/Equity ratio of 0.98. This is a neutral value indicating NOC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.98, NOC is doing worse than 75.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 12.01 | ||
| Altman-Z | 3.07 |
ROIC/WACC0.98
WACC9.63%
2.3 Liquidity
A Current Ratio of 1.04 indicates that NOC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.04, NOC is doing worse than 81.16% of the companies in the same industry.
A Quick Ratio of 0.93 indicates that NOC may have some problems paying its short term obligations.
NOC's Quick ratio of 0.93 is on the low side compared to the rest of the industry. NOC is outperformed by 71.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.93 |
3. Growth
3.1 Past
NOC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.69%.
The Earnings Per Share has been growing slightly by 4.20% on average over the past years.
The Revenue has decreased by -0.65% in the past year.
The Revenue has been growing slightly by 3.93% on average over the past years.
EPS 1Y (TTM)5.69%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%11.79%
Revenue 1Y (TTM)-0.65%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%1.3%
3.2 Future
NOC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.63% yearly.
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 2Y5.71%
EPS Next 3Y6.77%
EPS Next 5Y7.63%
Revenue Next Year2.05%
Revenue Next 2Y3.59%
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
Based on the Price/Earnings ratio of 22.95, the valuation of NOC can be described as rather expensive.
88.41% of the companies in the same industry are more expensive than NOC, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.86. NOC is around the same levels.
With a Price/Forward Earnings ratio of 20.92, NOC is valued on the expensive side.
NOC's Price/Forward Earnings ratio is rather cheap when compared to the industry. NOC is cheaper than 81.16% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.32. NOC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.95 | ||
| Fwd PE | 20.92 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NOC indicates a somewhat cheap valuation: NOC is cheaper than 68.12% of the companies listed in the same industry.
NOC's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 66.72 | ||
| EV/EBITDA | 18.57 |
4.3 Compensation for Growth
The decent profitability rating of NOC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)5.46
EPS Next 2Y5.71%
EPS Next 3Y6.77%
5. Dividend
5.1 Amount
NOC has a Yearly Dividend Yield of 1.58%.
NOC's Dividend Yield is rather good when compared to the industry average which is at 1.44. NOC pays more dividend than 89.86% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.41, NOC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.58% |
5.2 History
The dividend of NOC is nicely growing with an annual growth rate of 9.14%!
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
NOC pays out 31.28% of its income as dividend. This is a sustainable payout ratio.
The dividend of NOC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP31.28%
EPS Next 2Y5.71%
EPS Next 3Y6.77%
609.54
+4.53 (+0.75%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners85.04%
Inst Owner Change7.32%
Ins Owners0.21%
Ins Owner Change-0.67%
Market Cap87.27B
Analysts73.33
Price Target615.12 (0.92%)
Short Float %1.1%
Short Ratio2.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.58% |
Yearly Dividend8.04
Dividend Growth(5Y)9.14%
DP31.28%
Div Incr Years21
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.45%
Min EPS beat(2)-4.03%
Max EPS beat(2)3.14%
EPS beat(4)2
Avg EPS beat(4)3.24%
Min EPS beat(4)-4.03%
Max EPS beat(4)14.15%
EPS beat(8)6
Avg EPS beat(8)4.94%
EPS beat(12)8
Avg EPS beat(12)4.51%
EPS beat(16)11
Avg EPS beat(16)4.27%
Revenue beat(2)1
Avg Revenue beat(2)-1.83%
Min Revenue beat(2)-5.46%
Max Revenue beat(2)1.8%
Revenue beat(4)1
Avg Revenue beat(4)-2.58%
Min Revenue beat(4)-5.46%
Max Revenue beat(4)1.8%
Revenue beat(8)5
Avg Revenue beat(8)-0.6%
Revenue beat(12)8
Avg Revenue beat(12)-0.24%
Revenue beat(16)8
Avg Revenue beat(16)-1.07%
PT rev (1m)0.04%
PT rev (3m)10.2%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-15.16%
EPS NY rev (1m)0%
EPS NY rev (3m)0.78%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.5%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.95 | ||
| Fwd PE | 20.92 | ||
| P/S | 2.15 | ||
| P/FCF | 66.72 | ||
| P/OCF | 29.37 | ||
| P/B | 5.64 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.57 |
EPS(TTM)26.56
EY4.36%
EPS(NY)29.13
Fwd EY4.78%
FCF(TTM)9.14
FCFY1.5%
OCF(TTM)20.76
OCFY3.41%
SpS282.87
BVpS108.05
TBVpS-15.33
PEG (NY)N/A
PEG (5Y)5.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.98% | ||
| ROE | 25.5% | ||
| ROCE | 11.05% | ||
| ROIC | 9.44% | ||
| ROICexc | 9.96% | ||
| ROICexgc | 20.68% | ||
| OM | 9.82% | ||
| PM (TTM) | 9.74% | ||
| GM | 19.33% | ||
| FCFM | 3.23% |
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 Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 12.01 | ||
| Debt/EBITDA | 2.8 | ||
| Cap/Depr | 116.2% | ||
| Cap/Sales | 4.11% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 54.96% | ||
| Profit Quality | 33.16% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.93 | ||
| Altman-Z | 3.07 |
F-Score6
WACC9.63%
ROIC/WACC0.98
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)5.69%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%11.79%
EPS Next Y-1.58%
EPS Next 2Y5.71%
EPS Next 3Y6.77%
EPS Next 5Y7.63%
Revenue 1Y (TTM)-0.65%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%1.3%
Revenue Next Year2.05%
Revenue Next 2Y3.59%
Revenue Next 3Y4.03%
Revenue Next 5Y4.21%
EBIT growth 1Y42.82%
EBIT growth 3Y5.98%
EBIT growth 5Y1.94%
EBIT Next Year31.68%
EBIT Next 3Y14.91%
EBIT Next 5Y12.37%
FCF growth 1Y-42.18%
FCF growth 3Y6.79%
FCF growth 5Y-2.88%
OCF growth 1Y-21.85%
OCF growth 3Y7.15%
OCF growth 5Y0.42%