Northrop Grumman Corp

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NOC : NYSE : Industrial Goods
$247.06 -0.78 | -0.31%
Today's Range: 245.54 - 247.79
Avg. Daily Volume: 1028500.0
12/07/16 - 3:59 PM ET

Financial Analysis


NORTHROP GRUMMAN CORP's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. NORTHROP GRUMMAN CORP has weak liquidity. Currently, the Quick Ratio is 0.93 which shows a lack of ability to cover 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 remained virtually unchanged only increasing by 1.22% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)6155.05979.0
EBITDA ($mil)939.0907.0
EBIT ($mil)826.0794.0
Net Income ($mil)602.0516.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)1103.01292.0
Total Assets ($mil)24100.023966.0
Total Debt ($mil)6390.06527.0
Equity ($mil)5767.05697.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin26.0126.26
EBITDA Margin15.2515.16
Operating Margin13.4213.28
Sales Turnover0.991.0
Return on Assets8.858.49
Return on Equity37.035.75
Debt Q3 FY16 Q3 FY15
Current Ratio1.131.16
Debt/Capital0.530.53
Interest Expense74.075.0
Interest Coverage11.1610.59


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)176.78182.82
Div / share0.90.8
EPS3.352.75
Book value / share32.6231.16
Institutional Own % n/a n/a
Avg Daily Volume1008426.0915071.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 24.32 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 25.37. To use another comparison, its price-to-book ratio of 7.59 indicates a significant premium versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 16.06. 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.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
NOC 21.12 Peers 24.32   NOC 15.20 Peers 16.36

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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
NOC 20.80 Peers 20.74   NOC 1.66 Peers 2.08

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 discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NOC 7.59 Peers 16.06   NOC 12.90 Peers 160.37

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 1.84 Peers 1.62   NOC -0.26 Peers 3.81

Premium. 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 premium to 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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