NYSE:NOC

Stock Analysis Report

Executive Summary

Northrop Grumman Corporation operates as a security company.

Snowflake

Fundamentals

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Northrop Grumman's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-4.4%

NOC

-1.4%

US Aerospace & Defense

1.0%

US Market


1 Year Return

14.2%

NOC

7.5%

US Aerospace & Defense

8.0%

US Market

Return vs Industry: NOC exceeded the US Aerospace & Defense industry which returned 7.5% over the past year.

Return vs Market: NOC exceeded the US Market which returned 8% over the past year.


Shareholder returns

NOCIndustryMarket
7 Day-4.4%-1.4%1.0%
30 Day-4.8%-2.8%-0.07%
90 Day8.1%1.6%-1.0%
1 Year16.1%14.2%9.6%7.5%10.4%8.0%
3 Year69.4%61.9%59.1%50.3%46.2%36.7%
5 Year190.7%167.9%92.0%73.6%64.3%46.2%

Price Volatility Vs. Market

How volatile is Northrop Grumman's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Northrop Grumman undervalued compared to its fair value and its price relative to the market?

7.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NOC ($350.39) is trading below our estimate of fair value ($379.16)

Significantly Below Fair Value: NOC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: NOC is good value based on its PE Ratio (18.1x) compared to the Aerospace & Defense industry average (21.6x).

PE vs Market: NOC is poor value based on its PE Ratio (18.1x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: NOC is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: NOC is overvalued based on its PB Ratio (6.4x) compared to the US Aerospace & Defense industry average (2.5x).


Next Steps

Future Growth

How is Northrop Grumman forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

9.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NOC's forecast earnings growth (9.1% per year) is above the savings rate (2.7%).

Earnings vs Market: NOC's earnings (9.1% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: NOC's earnings are forecast to grow, but not significantly.

Revenue vs Market: NOC's revenue (5.6% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: NOC's revenue (5.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NOC's Return on Equity is forecast to be high in 3 years time (35.8%)


Next Steps

Past Performance

How has Northrop Grumman performed over the past 5 years?

13.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: NOC's earnings have grown by 13.3% per year over the past 5 years.

Accelerating Growth: NOC's earnings growth over the past year (0.9%) is below its 5-year average (13.3% per year).

Earnings vs Industry: NOC earnings growth over the past year (0.9%) underperformed the Aerospace & Defense industry 10.5%.


Return on Equity

High ROE: Whilst NOC's Return on Equity (36.08%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: NOC has a higher Return on Assets than the Aerospace & Defense industry average last year.


Return on Capital Employed

ROCE Improving: NOC's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Northrop Grumman's financial position?


Financial Position Analysis

Short Term Liabilities: NOC's short term assets ($10.2B) exceeds its short term liabilities ($8.2B)

Long Term Liabilities: NOC's short term assets (10.2B) do not cover its long term liabilities (22.2B)


Debt to Equity History and Analysis

Debt Level: NOC's debt to equity ratio (159.3%) is considered high

Reducing Debt: NOC's debt to equity ratio has increased from 57.8% to 159.3% over the past 5 years.

Debt Coverage: NOC's debt is well covered by operating cash flow (26.4%).

Interest Coverage: NOC's interest payments on its debt are well covered by EBIT (7.8x coverage).


Balance Sheet

Inventory Level: NOC has a high level of physical assets or inventory.

Debt Coverage by Assets: NOC's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Northrop Grumman's current dividend yield, its reliability and sustainability?

1.51%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years1.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: NOC's dividend (1.51%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: NOC's dividend (1.51%) is low compared to the top 25% of dividend payers in the US market (3.68%).

Stable Dividend: NOC's dividends per share have been stable in the past 10 years.

Growing Dividend: NOC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (25.4%), NOC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NOC's dividends in 3 years are forecast to be well covered by earnings (23.3% payout ratio).


Next Steps

Management

What is the CEO of Northrop Grumman's salary, the management and board of directors tenure and is there insider trading?

4.8yrs

Average management tenure


CEO

Kathy Warden (47yo)

0.8yrs

Tenure

US$13,342,307

Compensation

Ms. Kathy J. Warden has been President of Northrop Grumman Corporation since January 1, 2018, Chief Executive Officer since January 1, 2019 and Chairman of the Board August 1, 2019. Ms. Warden served as th ...


CEO Compensation Analysis

Compensation vs. Market: Kathy has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

Compensation vs Earnings: Kathy's compensation has increased by more than 20% in the past year.


Management Age and Tenure

4.8yrs

Average Tenure

56yo

Average Age

Experienced Management: NOC's management team is considered experienced (4.8 years average tenure).


Board Age and Tenure

7.8yrs

Average Tenure

68.5yo

Average Age

Experienced Board: NOC's board of directors are considered experienced (7.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$306,02022 May 19
Madeleine Kleiner
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares971
Max PriceUS$315.16
SellUS$783,70601 Mar 19
Shawn Purvis
EntityIndividual
Shares2,737
Max PriceUS$287.10
SellUS$501,12701 Mar 19
Kenneth Bedingfield
EntityIndividual
Role
Chief Financial Officer
Corporate VP & CFO
Shares1,750
Max PriceUS$286.36
SellUS$3,816,83827 Feb 19
David Perry
EntityIndividual
Shares13,210
Max PriceUS$290.08
SellUS$3,155,09025 Feb 19
Christopher Jones
EntityIndividual
Shares10,983
Max PriceUS$288.18
SellUS$1,236,25022 Feb 19
Lesley Kalan
EntityIndividual
Shares4,312
Max PriceUS$286.70
SellUS$22,213,95121 Feb 19
Wesley Bush
EntityIndividual
Shares77,333
Max PriceUS$288.22

Ownership Breakdown


Management Team

  • Raj Chandhok (69yo)

    Vice President of Trust Administration and Investments

    • Tenure: 16.4yrs
  • Sheila Cheston (60yo)

    Corporate VP & General Counsel

    • Tenure: 9.2yrs
    • Compensation: US$6.20m
  • Blake Larson (59yo)

    Corporate VP & President of Innovation Systems Sector

    • Tenure: 0yrs
    • Compensation: US$8.09m
  • Michael Hardesty (47yo)

    Corporate VP

    • Tenure: 6.7yrs
  • Todd Ernst

    Vice President of Investor Relations

    • Tenure: 0.2yrs
  • Pat Antkowiak (58yo)

    Corporate Vice President and Chief Strategy & Technology Officer

    • Tenure: 4.9yrs
  • Kathy Warden (47yo)

    Chairman

    • Tenure: 0.8yrs
    • Compensation: US$13.34m
  • Mark Caylor (54yo)

    Corporate VP & President of Mission Systems Sector

    • Tenure: 1.8yrs
    • Compensation: US$6.15m
  • Ken Bedingfield (46yo)

    Corporate VP & CFO

    • Tenure: 4.7yrs
    • Compensation: US$5.92m
  • Carl Hahn

    Chief Compliance Officer & VP

    • Tenure: 4.8yrs

Board Members

  • Karl Krapek (70yo)

    Independent Director

    • Tenure: 11.1yrs
    • Compensation: US$310.56k
  • Don Felsinger (71yo)

    Lead Independent Director

    • Tenure: 7.4yrs
    • Compensation: US$352.18k
  • Bill Hernandez (71yo)

    Independent Director

    • Tenure: 6.1yrs
    • Compensation: US$321.40k
  • Tom Schoewe (66yo)

    Independent Director

    • Tenure: 8.2yrs
    • Compensation: US$295.99k
  • Bruce Gordon (73yo)

    Independent Director

    • Tenure: 11yrs
    • Compensation: US$323.33k
  • Madeleine Kleiner (67yo)

    Independent Director

    • Tenure: 11yrs
    • Compensation: US$328.18k
  • Kathleen Thomas

    Chairman of the Learning & Development Council and Vice President of Learning & Development

    • Tenure: 0yrs
  • Kathy Warden (47yo)

    Chairman

    • Tenure: 0.8yrs
    • Compensation: US$13.34m
  • Jim Stavridis (64yo)

    Chair of International Advisory Board

    • Tenure: 0yrs
  • Warren King

    Chairman of Northrop Grumman Australia Advisory Board

    • Tenure: 1.7yrs

Company Information

Northrop Grumman Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Northrop Grumman Corporation
  • Ticker: NOC
  • Exchange: NYSE
  • Founded: 1939
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$59.285b
  • Shares outstanding: 169.20m
  • Website: https://www.northropgrumman.com

Number of Employees


Location

  • Northrop Grumman Corporation
  • 2980 Fairview Park Drive
  • Falls Church
  • Virginia
  • 22042
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NOCNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
NTHDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0K92LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
NOC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
NOCOWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
NOCG34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REP 0.2 COM USD1BRBRLMay 2019

Biography

Northrop Grumman Corporation operates as a security company. It provides various systems, products, and solutions in autonomous systems, cyber, space, strike, and logistics and modernization, as well as in ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 23:40
End of Day Share Price2019/10/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.