NORTHROP GRUMMAN CORP (NOC) Stock Fundamental Analysis
NYSE:NOC - New York Stock Exchange, Inc. - US6668071029 - Common Stock - Currency: USD
Taking everything into account, NOC scores 5 out of 10 in our fundamental rating. NOC was compared to 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.
NOC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NOC has a better Return On Assets (7.66%) than 82.81% of its industry peers.
NOC's Return On Equity of 24.77% is amongst the best of the industry. NOC outperforms 92.19% of its industry peers.
NOC's Return On Invested Capital of 9.59% is fine compared to the rest of the industry. NOC outperforms 78.13% 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 7.94%.
The last Return On Invested Capital (9.59%) for NOC is above the 3 year average (8.81%), which is a sign of increasing profitability.
| 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 better Profit Margin (9.19%) than 76.56% 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 64.06% of its industry peers.
NOC's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 19.34%, NOC is doing worse than 67.19% of the companies in the same industry.
NOC's Gross Margin has been stable in the last couple of years.
| 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
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.
Compared to 5 years ago, NOC has less shares outstanding
The debt/assets ratio for NOC is higher compared to a year ago.
2.2 Solvency
NOC has an Altman-Z score of 2.73. 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 2.73. This is comparable to the rest of the industry: NOC outperforms 45.31% 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.
The Debt to FCF ratio of NOC (8.32) is better than 60.94% 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.
NOC has a worse Debt to Equity ratio (0.95) than 73.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 8.32 | ||
| Altman-Z | 2.73 |
ROIC/WACC0.96
WACC10%
2.3 Liquidity
A Current Ratio of 0.95 indicates that NOC may have some problems paying its short term obligations.
NOC has a Current ratio of 0.95. This is amonst the worse of the industry: NOC underperforms 90.63% of its industry peers.
NOC has a Quick Ratio of 0.95. This is a bad value and indicates that NOC is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.84, NOC is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
| 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.
NOC shows a small growth in Revenue. In the last year, the Revenue has grown by 0.61%.
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
Based on estimates for the next years, NOC will show a small growth in Earnings Per Share. The EPS will grow by 7.66% on average per year.
Based on estimates for the next years, NOC will show a small growth in Revenue. The Revenue will grow by 4.20% on average per year.
EPS Next Y-2.31%
EPS Next 2Y5.41%
EPS Next 3Y6.25%
EPS Next 5Y7.66%
Revenue Next Year1.93%
Revenue Next 2Y3.33%
Revenue Next 3Y3.85%
Revenue Next 5Y4.2%
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
With a Price/Earnings ratio of 18.36, NOC is valued on the expensive side.
NOC's Price/Earnings ratio is rather cheap when compared to the industry. NOC is cheaper than 85.94% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.03. NOC is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 16.36, NOC is valued correctly.
NOC's Price/Forward Earnings ratio is rather cheap when compared to the industry. NOC is cheaper than 82.81% of the companies in the same industry.
NOC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.36 | ||
| Fwd PE | 16.36 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NOC is valued a bit cheaper than the industry average as 70.31% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, NOC is valued a bit cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.41 | ||
| EV/EBITDA | 15.4 |
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)4.37
EPS Next 2Y5.41%
EPS Next 3Y6.25%
5. Dividend
5.1 Amount
NOC has a Yearly Dividend Yield of 1.76%.
Compared to an average industry Dividend Yield of 1.34, NOC pays a better dividend. On top of this NOC pays more dividend than 89.06% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.36, NOC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.14%
Div Incr Years20
Div Non Decr Years33
5.3 Sustainability
NOC pays out 32.47% 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.
DP32.47%
EPS Next 2Y5.41%
EPS Next 3Y6.25%
473.9
-2.7 (-0.57%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners84.82%
Inst Owner Change2.55%
Ins Owners0.2%
Ins Owner Change1.59%
Market Cap68.21B
Analysts75.17
Price Target553.68 (16.83%)
Short Float %1.89%
Short Ratio2.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
Yearly Dividend8.04
Dividend Growth(5Y)9.14%
DP32.47%
Div Incr Years20
Div Non Decr Years33
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)-1.3%
PT rev (3m)-0.81%
EPS NQ rev (1m)-7.91%
EPS NQ rev (3m)-7.15%
EPS NY rev (1m)-10.23%
EPS NY rev (3m)-10.38%
Revenue NQ rev (1m)-2.97%
Revenue NQ rev (3m)-2.76%
Revenue NY rev (1m)-0.5%
Revenue NY rev (3m)-0.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.36 | ||
| Fwd PE | 16.36 | ||
| P/S | 1.69 | ||
| P/FCF | 38.41 | ||
| P/OCF | 19.33 | ||
| P/B | 4.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.4 |
EPS(TTM)25.81
EY5.45%
EPS(NY)28.96
Fwd EY6.11%
FCF(TTM)12.34
FCFY2.6%
OCF(TTM)24.52
OCFY5.17%
SpS280.47
BVpS104.11
TBVpS-18.7
PEG (NY)N/A
PEG (5Y)4.37
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 | 2.73 |
F-Score6
WACC10%
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 5Y7.66%
Revenue 1Y (TTM)0.61%
Revenue growth 3Y4.78%
Revenue growth 5Y3.93%
Sales Q2Q%-6.56%
Revenue Next Year1.93%
Revenue Next 2Y3.33%
Revenue Next 3Y3.85%
Revenue Next 5Y4.2%
EBIT growth 1Y45.51%
EBIT growth 3Y5.98%
EBIT growth 5Y1.94%
EBIT Next Year40.03%
EBIT Next 3Y14.4%
EBIT Next 5Y10.25%
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%