Northrop Grumman Corp

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NOC : NYSE : Industrial Goods
$256.02 -1.4 | -0.54%
Today's Range: 255.66 - 259.91
Avg. Daily Volume: 785200.0
06/26/17 - 3:59 PM ET

Financial Analysis

NORTHROP GRUMMAN CORP's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. NORTHROP GRUMMAN CORP has average liquidity. Currently, the Quick Ratio is 1.06 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.12% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)6267.05956.0
EBITDA ($mil)936.0842.0
EBIT ($mil)832.0739.0
Net Income ($mil)640.0556.0

Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)1403.01277.0
Total Assets ($mil)25413.023933.0
Total Debt ($mil)7060.06389.0
Equity ($mil)5558.05621.0

Profitability Q1 FY17 Q1 FY16
Gross Profit Margin25.7425.15
EBITDA Margin14.9314.13
Operating Margin13.2812.41
Sales Turnover0.980.98
Return on Assets8.988.61
Return on Equity41.0936.68
Debt Q1 FY17 Q1 FY16
Current Ratio1.271.15
Interest Expense75.076.0
Interest Coverage11.099.72

Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)174.68180.83
Div / share0.90.8
Book value / share31.8231.08
Institutional Own % n/a n/a
Avg Daily Volume782210.0961646.0


BUY. This stock's P/E ratio indicates a discount compared to an average of 22.73 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 25.75. To use another comparison, its price-to-book ratio of 8.07 indicates a significant premium versus the S&P 500 average of 3.09 and a significant discount versus the industry average of 266.67. The current price-to-sales ratio is below the S&P 500 average, but above the industry average. Upon assessment of these and other key valuation criteria, NORTHROP GRUMMAN CORP proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
NOC 20.09 Peers 22.73   NOC 18.50 Peers 17.02

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

NOC is trading at a discount to its peers.


Average. 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 valuation on par to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
NOC 19.10 Peers 21.57   NOC 15.34 Peers 9.46

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.


Premium. 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 premium to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NOC 8.07 Peers 266.67   NOC 16.16 Peers 23.52

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.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
NOC 1.81 Peers 1.75   NOC 5.50 Peers 5.30

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.


Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

NOC is keeping pace with its peers on the basis of sales growth.



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