NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
NYSE:NOC - New York Stock Exchange, Inc. - US6668071029 - Common Stock - Currency: USD
NOC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 64 industry peers in the Aerospace & Defense industry. NOC scores excellent on profitability, but 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.
NOC had a positive operating cash flow in the past year.
Each year in the past 5 years NOC has been profitable.
Each year in the past 5 years NOC had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 7.66%, NOC belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
With an excellent Return On Equity value of 24.77%, NOC belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
NOC has a better Return On Invested Capital (9.59%) than 80.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NOC is in line with the industry average of 8.39%.
The 3 year average ROIC (8.81%) for NOC is below the current ROIC(9.59%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.66% | ||
| ROE | 24.77% | ||
| ROIC | 9.59% |
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 9.19%. This is in the better half of the industry: NOC outperforms 78.46% of its industry peers.
In the last couple of years the Profit Margin of NOC has grown nicely.
NOC has a Operating Margin of 9.59%. This is in the better half of the industry: NOC outperforms 63.08% of its industry peers.
NOC's Operating Margin has declined in the last couple of years.
The Gross Margin of NOC (19.34%) is worse than 67.69% 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 | 9.59% | ||
| PM (TTM) | 9.19% | ||
| GM | 19.34% |
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.
The number of shares outstanding for NOC has been reduced compared to 1 year ago.
The number of shares outstanding for NOC has been reduced compared to 5 years ago.
NOC has a worse debt/assets ratio than last year.
2.2 Solvency
NOC has an Altman-Z score of 2.84. This is not the best score and indicates that NOC is in the grey zone with still only limited risk for bankruptcy at the moment.
NOC has a Altman-Z score of 2.84. This is comparable to the rest of the industry: NOC outperforms 46.15% of its industry peers.
The Debt to FCF ratio of NOC is 8.32, which is on the high side as it means it would take NOC, 8.32 years of fcf income to pay off all of its debts.
NOC has a better Debt to FCF ratio (8.32) than 61.54% of its industry peers.
NOC has a Debt/Equity ratio of 0.95. This is a neutral value indicating NOC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.95, NOC is doing worse than 72.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 8.32 | ||
| Altman-Z | 2.84 |
ROIC/WACC0.96
WACC9.98%
2.3 Liquidity
A Current Ratio of 0.95 indicates that NOC may have some problems paying its short term obligations.
With a Current ratio value of 0.95, NOC is not doing good in the industry: 90.77% of the companies in the same industry are doing better.
A Quick Ratio of 0.84 indicates that NOC may have some problems paying its short term obligations.
The Quick ratio of NOC (0.84) is worse than 75.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
NOC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.05%.
The Earnings Per Share has been growing slightly by 4.20% on average over the past years.
The Revenue has been growing slightly by 0.61% in the past year.
The Revenue has been growing slightly by 3.93% on average over the past years.
EPS 1Y (TTM)7.05%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%-4.11%
Revenue 1Y (TTM)0.61%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%-6.56%
3.2 Future
NOC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.54% yearly.
NOC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.18% yearly.
EPS Next Y-2.31%
EPS Next 2Y5.41%
EPS Next 3Y6.25%
EPS Next 5Y7.54%
Revenue Next Year1.94%
Revenue Next 2Y3.32%
Revenue Next 3Y3.84%
Revenue Next 5Y4.18%
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.
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
A Price/Earnings ratio of 20.02 indicates a rather expensive valuation of NOC.
Based on the Price/Earnings ratio, NOC is valued cheaply inside the industry as 86.15% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.32, NOC is valued a bit cheaper.
A Price/Forward Earnings ratio of 17.84 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 86.15% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.13, NOC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.02 | ||
| Fwd PE | 17.84 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NOC is valued a bit cheaper than 69.23% of the companies in the same industry.
NOC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NOC is cheaper than 73.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.88 | ||
| EV/EBITDA | 16.56 |
4.3 Compensation for Growth
The decent profitability rating of NOC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.76
EPS Next 2Y5.41%
EPS Next 3Y6.25%
5. Dividend
5.1 Amount
NOC has a Yearly Dividend Yield of 1.86%.
NOC's Dividend Yield is rather good when compared to the industry average which is at 1.29. NOC pays more dividend than 89.23% of the companies in the same industry.
NOC's Dividend Yield is slightly below the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
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 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 32.47% 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.
DP32.47%
EPS Next 2Y5.41%
EPS Next 3Y6.25%
516.72
+19.59 (+3.94%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners84.17%
Inst Owner Change2.57%
Ins Owners0.22%
Ins Owner Change0.97%
Market Cap74.37B
Analysts75.17
Price Target553.97 (7.21%)
Short Float %1.88%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
Yearly Dividend8.04
Dividend Growth(5Y)9.14%
DP32.47%
Div Incr Years21
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.17%
Min EPS beat(2)-4.03%
Max EPS beat(2)-0.3%
EPS beat(4)2
Avg EPS beat(4)4.01%
Min EPS beat(4)-4.03%
Max EPS beat(4)14.15%
EPS beat(8)5
Avg EPS beat(8)4.46%
EPS beat(12)8
Avg EPS beat(12)4.56%
EPS beat(16)11
Avg EPS beat(16)4.63%
Revenue beat(2)0
Avg Revenue beat(2)-4.67%
Min Revenue beat(2)-5.46%
Max Revenue beat(2)-3.89%
Revenue beat(4)1
Avg Revenue beat(4)-2.79%
Min Revenue beat(4)-5.46%
Max Revenue beat(4)0.99%
Revenue beat(8)5
Avg Revenue beat(8)-0.65%
Revenue beat(12)7
Avg Revenue beat(12)-0.72%
Revenue beat(16)8
Avg Revenue beat(16)-0.97%
PT rev (1m)0.05%
PT rev (3m)-0.86%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)-7.92%
EPS NY rev (1m)0%
EPS NY rev (3m)-10.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.97%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.02 | ||
| Fwd PE | 17.84 | ||
| P/S | 1.84 | ||
| P/FCF | 41.88 | ||
| P/OCF | 21.07 | ||
| P/B | 4.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.56 |
EPS(TTM)25.81
EY4.99%
EPS(NY)28.96
Fwd EY5.61%
FCF(TTM)12.34
FCFY2.39%
OCF(TTM)24.52
OCFY4.75%
SpS280.47
BVpS104.11
TBVpS-18.7
PEG (NY)N/A
PEG (5Y)4.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.66% | ||
| ROE | 24.77% | ||
| ROCE | 11.22% | ||
| ROIC | 9.59% | ||
| ROICexc | 10.08% | ||
| ROICexgc | 21.85% | ||
| OM | 9.59% | ||
| PM (TTM) | 9.19% | ||
| GM | 19.34% | ||
| FCFM | 4.4% |
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 | 0.95 | ||
| Debt/FCF | 8.32 | ||
| Debt/EBITDA | 2.68 | ||
| Cap/Depr | 124.5% | ||
| Cap/Sales | 4.34% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 66.84% | ||
| Profit Quality | 47.86% | ||
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 2.84 |
F-Score6
WACC9.98%
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)7.05%
EPS 3Y0.58%
EPS 5Y4.2%
EPS Q2Q%-4.11%
EPS Next Y-2.31%
EPS Next 2Y5.41%
EPS Next 3Y6.25%
EPS Next 5Y7.54%
Revenue 1Y (TTM)0.61%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%-6.56%
Revenue Next Year1.94%
Revenue Next 2Y3.32%
Revenue Next 3Y3.84%
Revenue Next 5Y4.18%
EBIT growth 1Y45.51%
EBIT growth 3Y5.98%
EBIT growth 5Y1.94%
EBIT Next Year30.83%
EBIT Next 3Y14.76%
EBIT Next 5Y12.37%
FCF growth 1Y49.62%
FCF growth 3Y6.79%
FCF growth 5Y-2.88%
OCF growth 1Y31.34%
OCF growth 3Y7.15%
OCF growth 5Y0.42%