NORTHROP GRUMMAN CORP (NOC)
US6668071029 - Common Stock
Taking everything into account, NOC scores 4 out of 10 in our fundamental rating. NOC was compared to 65 industry peers in the Aerospace & Defense industry. NOC has only an average score on both its financial health and profitability. NOC is not valued too expensively and it also shows a decent 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.
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 (4.51%) than 65.63% of its industry peers.
With a decent Return On Equity value of 15.17%, NOC is doing good in the industry, outperforming 79.69% of the companies in the same industry.
With a decent Return On Invested Capital value of 6.58%, NOC is doing good in the industry, outperforming 62.50% of the companies in the same industry.
NOC had an Average Return On Invested Capital over the past 3 years of 8.47%. This is in line with the industry average of 8.78%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.51% | ||
| ROE | 15.17% | ||
| ROIC | 6.58% |
ROA(3y)10.69%
ROA(5y)8.94%
ROE(3y)33.35%
ROE(5y)31.14%
ROIC(3y)8.47%
ROIC(5y)9.23%
1.3 Margins
NOC has a Profit Margin of 5.38%. This is in the better half of the industry: NOC outperforms 60.94% of its industry peers.
In the last couple of years the Profit Margin of NOC has declined.
The Operating Margin of NOC (6.63%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of NOC has declined.
NOC has a worse Gross Margin (16.70%) than 67.19% of its industry peers.
In the last couple of years the Gross Margin of NOC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.63% | ||
| PM (TTM) | 5.38% | ||
| GM | 16.7% |
OM growth 3Y-16.39%
OM growth 5Y-12.46%
PM growth 3Y-15.48%
PM growth 5Y-13.38%
GM growth 3Y-6.38%
GM growth 5Y-5.87%
2. Health
2.1 Basic Checks
NOC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
An Altman-Z score of 2.73 indicates that NOC is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of NOC (2.73) is comparable to the rest of the industry.
The Debt to FCF ratio of NOC is 7.65, which is on the high side as it means it would take NOC, 7.65 years of fcf income to pay off all of its debts.
NOC's Debt to FCF ratio of 7.65 is fine compared to the rest of the industry. NOC outperforms 60.94% of its industry peers.
NOC has a Debt/Equity ratio of 1.04. This is a high value indicating a heavy dependency on external financing.
NOC has a Debt to Equity ratio of 1.04. This is in the lower half of the industry: NOC underperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.04 | ||
| Debt/FCF | 7.65 | ||
| Altman-Z | 2.73 |
ROIC/WACC0.75
WACC8.79%
2.3 Liquidity
NOC has a Current Ratio of 1.13. This is a normal value and indicates that NOC is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of NOC (1.13) is worse than 71.88% of its industry peers.
A Quick Ratio of 1.02 indicates that NOC should not have too much problems paying its short term obligations.
NOC's Quick ratio of 1.02 is in line compared to the rest of the industry. NOC outperforms 42.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
NOC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.63%.
The Earnings Per Share has been growing slightly by 4.30% on average over the past years.
The Revenue has grown by 8.13% in the past year. This is quite good.
Measured over the past years, NOC shows a small growth in Revenue. The Revenue has been growing by 5.48% on average per year.
EPS 1Y (TTM)-4.63%
EPS 3Y-0.95%
EPS 5Y4.3%
EPS growth Q2Q14.91%
Revenue 1Y (TTM)8.13%
Revenue growth 3Y2.21%
Revenue growth 5Y5.48%
Revenue growth Q2Q8.95%
3.2 Future
The Earnings Per Share is expected to grow by 8.04% on average over the next years. This is quite good.
Based on estimates for the next years, NOC will show a small growth in Revenue. The Revenue will grow by 4.88% on average per year.
EPS Next Y6.91%
EPS Next 2Y9.42%
EPS Next 3Y8.5%
EPS Next 5Y8.04%
Revenue Next Year5.1%
Revenue Next 2Y5.22%
Revenue Next 3Y5.28%
Revenue Next 5Y4.88%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
The Price/Earnings ratio is 19.74, which indicates a rather expensive current valuation of NOC.
NOC's Price/Earnings ratio is rather cheap when compared to the industry. NOC is cheaper than 84.38% of the companies in the same industry.
When comparing the Price/Earnings ratio of NOC to the average of the S&P500 Index (28.31), we can say NOC is valued slightly cheaper.
NOC is valuated rather expensively with a Price/Forward Earnings ratio of 17.07.
NOC's Price/Forward Earnings ratio is rather cheap when compared to the industry. NOC is cheaper than 90.63% of the companies in the same industry.
NOC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.48.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.74 | ||
| Fwd PE | 17.07 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as NOC.
Based on the Price/Free Cash Flow ratio, NOC is valued a bit cheaper than the industry average as 78.13% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.99 | ||
| EV/EBITDA | 20.83 |
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.
PEG (NY)2.86
PEG (5Y)4.59
EPS Next 2Y9.42%
EPS Next 3Y8.5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.57%, NOC has a reasonable but not impressive dividend return.
NOC's Dividend Yield is rather good when compared to the industry average which is at 1.30. NOC pays more dividend than 89.06% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.39, NOC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
5.2 History
The dividend of NOC is nicely growing with an annual growth rate of 9.12%!
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)9.12%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
52.32% of the earnings are spent on dividend by NOC. This is a bit on the high side, but may be sustainable.
NOC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP52.32%
EPS Next 2Y9.42%
EPS Next 3Y8.5%
NORTHROP GRUMMAN CORP
NYSE:NOC (5/10/2024, 1:12:55 PM)
475.92
+2.49 (+0.53%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap70.43B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.74 | ||
| Fwd PE | 17.07 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.86
PEG (5Y)4.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.51% | ||
| ROE | 15.17% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 6.63% | ||
| PM (TTM) | 5.38% | ||
| GM | 16.7% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.04 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-4.63%
EPS 3Y-0.95%
EPS 5Y
EPS growth Q2Q
EPS Next Y6.91%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.13%
Revenue growth 3Y2.21%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y