Northrop Grumman Corp.

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NOC : NYSE : Electronic Technology
$356.0 -0.91 | -0.26%
Today's Range: 354.74 - 358.84
Avg. Daily Volume: 886500.0
02/16/18 - 4:02 PM ET

Financial Analysis


NORTHROP GRUMMAN CORP's gross profit margin for the fourth quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. NORTHROP GRUMMAN CORP is extremely liquid. Currently, the Quick Ratio is 2.18 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 34.01% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY17 Q4 FY16
Net Sales ($mil)6634.06397.0
EBITDA ($mil)920.0965.0
EBIT ($mil)767.0831.0
Net Income ($mil)178.0525.0


Balance Sheet Q4 FY17 Q4 FY16
Cash & Equiv. ($mil)11225.02541.0
Total Assets ($mil)34917.025614.0
Total Debt ($mil)15266.07070.0
Equity ($mil)7048.05259.0


Profitability Q4 FY17 Q4 FY16
Gross Profit Margin23.6125.18
EBITDA Margin13.8615.08
Operating Margin11.5612.99
Sales Turnover0.740.96
Return on Assets5.778.58
Return on Equity28.5841.83
Debt Q4 FY17 Q4 FY16
Current Ratio2.351.22
Debt/Capital0.680.57
Interest Expense136.077.0
Interest Coverage5.6410.79


Share Data Q4 FY17 Q4 FY16
Shares outstanding (mil)174.09175.07
Div / share1.00.9
EPS1.012.96
Book value / share40.4930.04
Institutional Own % n/a n/a
Avg Daily Volume927190.0657854.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 31.29 for the Aerospace & Defense industry and a premium compared to the S&P 500 average of 25.51. To use another comparison, its price-to-book ratio of 8.82 indicates a significant premium versus the S&P 500 average of 3.26 and a significant discount versus the industry average of 179.92. The current price-to-sales ratio is above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, NORTHROP GRUMMAN CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
NOC 31.12 Peers 31.29   NOC 23.78 Peers 19.18

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

NOC is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

NOC is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
NOC 20.87 Peers 23.31   NOC 0.92 Peers 5.56

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

NOC is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

NOC trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NOC 8.82 Peers 179.92   NOC -5.91 Peers 17.54

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

NOC is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, NOC is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
NOC 2.41 Peers 2.22   NOC 5.28 Peers 9.68

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

NOC is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

NOC significantly trails its peers on the basis of sales growth

 

 

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