NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
NYSE:NOC - US6668071029 - Common Stock
592.44 USD
-4.77 (-0.8%)
592.44 USD
0 (0%)
Taking everything into account, NOC scores 5 out of 10 in our fundamental rating. NOC was compared to 68 industry peers in the Aerospace & Defense industry. NOC scores excellent on profitability, but there are some minor 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
NOC had positive earnings in the past year.
NOC had a positive operating cash flow in the past year.
NOC had positive earnings in each of the past 5 years.
In the past 5 years NOC always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.98%, NOC belongs to the top of the industry, outperforming 89.71% of the companies in the same industry.
NOC has a Return On Equity of 25.50%. This is amongst the best in the industry. NOC outperforms 95.59% of its industry peers.
The Return On Invested Capital of NOC (9.44%) is better than 82.35% 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 8.59%.
The last Return On Invested Capital (9.44%) for NOC is above the 3 year average (8.81%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 9.74%, NOC is in the better half of the industry, outperforming 77.94% of the companies in the same industry.
NOC's Profit Margin has improved in the last couple of years.
NOC's Operating Margin of 9.82% is fine compared to the rest of the industry. NOC outperforms 66.18% of its industry peers.
NOC's Operating Margin has declined in the last couple of years.
NOC has a worse Gross Margin (19.33%) than 66.18% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NOC is destroying value.
Compared to 1 year ago, NOC has less shares outstanding
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
NOC has an Altman-Z score of 3.03. This indicates that NOC is financially healthy and has little risk of bankruptcy at the moment.
NOC has a Altman-Z score (3.03) which is in line with its industry peers.
The Debt to FCF ratio of NOC is 12.01, which is on the high side as it means it would take NOC, 12.01 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 12.01, NOC is doing good in the industry, outperforming 60.29% of the companies in the same industry.
A Debt/Equity ratio of 0.98 indicates that NOC is somewhat dependend on debt financing.
NOC has a Debt to Equity ratio of 0.98. This is in the lower half of the industry: NOC underperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 12.01 | ||
| Altman-Z | 3.03 |
ROIC/WACC0.96
WACC9.8%
2.3 Liquidity
NOC has a Current Ratio of 1.04. This is a normal value and indicates that NOC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.04, NOC is doing worse than 80.88% 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 has a Quick ratio of 0.93. This is in the lower half of the industry: NOC underperforms 69.12% 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
The Earnings Per Share is expected to grow by 7.63% on average over the next years.
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 22.31, NOC is valued on the expensive side.
NOC's Price/Earnings ratio is rather cheap when compared to the industry. NOC is cheaper than 85.29% of the companies in the same industry.
NOC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.34 indicates a rather expensive valuation of NOC.
77.94% of the companies in the same industry are more expensive than NOC, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of NOC to the average of the S&P500 Index (35.82), we can say NOC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.31 | ||
| Fwd PE | 20.34 |
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 70.59% of the companies listed in the same industry.
NOC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NOC is cheaper than 61.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 64.85 | ||
| EV/EBITDA | 18.24 |
4.3 Compensation for Growth
NOC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)5.31
EPS Next 2Y5.71%
EPS Next 3Y6.77%
5. Dividend
5.1 Amount
NOC has a Yearly Dividend Yield of 1.55%.
Compared to an average industry Dividend Yield of 1.18, NOC pays a better dividend. On top of this NOC pays more dividend than 89.71% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.32, NOC is paying slightly less dividend.
| 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 paid a dividend for at least 10 years, which is 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
31.28% 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.
DP31.28%
EPS Next 2Y5.71%
EPS Next 3Y6.77%
592.44
-4.77 (-0.8%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners84.46%
Inst Owner Change7.33%
Ins Owners0.21%
Ins Owner Change-0.98%
Market Cap84.83B
Analysts75
Price Target614.89 (3.79%)
Short Float %1.66%
Short Ratio2.93
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
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)9.75%
PT rev (3m)11.05%
EPS NQ rev (1m)-3.67%
EPS NQ rev (3m)-9.93%
EPS NY rev (1m)0.81%
EPS NY rev (3m)0.75%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)1.84%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.31 | ||
| Fwd PE | 20.34 | ||
| P/S | 2.09 | ||
| P/FCF | 64.85 | ||
| P/OCF | 28.54 | ||
| P/B | 5.48 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.24 |
EPS(TTM)26.56
EY4.48%
EPS(NY)29.13
Fwd EY4.92%
FCF(TTM)9.14
FCFY1.54%
OCF(TTM)20.76
OCFY3.5%
SpS282.87
BVpS108.05
TBVpS-15.33
PEG (NY)N/A
PEG (5Y)5.31
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 | 3.03 |
F-Score6
WACC9.8%
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)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%