Northrop Grumman Corp

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NOC : NYSE : Industrial Goods
$246.33 | %
Today's Range: 244.88 - 247.43
Avg. Daily Volume: 928900.0
04/21/17 - 4:02 PM ET

Financial Analysis


NORTHROP GRUMMAN CORP's gross profit margin for the fourth quarter of its fiscal year 2016 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 1.04 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 4.76% 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 Q4 FY16 Q4 FY15
Net Sales ($mil)6397.05694.0
EBITDA ($mil)965.0827.0
EBIT ($mil)831.0689.0
Net Income ($mil)525.0459.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)2541.02319.0
Total Assets ($mil)25614.024454.0
Total Debt ($mil)7070.06526.0
Equity ($mil)5259.05522.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin25.1825.54
EBITDA Margin15.0814.52
Operating Margin12.9912.1
Sales Turnover0.960.96
Return on Assets8.588.13
Return on Equity41.8336.03
Debt Q4 FY16 Q4 FY15
Current Ratio1.221.16
Debt/Capital0.570.54
Interest Expense77.075.0
Interest Coverage10.799.19


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)175.07181.3
Div / share0.90.8
EPS2.962.49
Book value / share30.0430.46
Institutional Own % n/a n/a
Avg Daily Volume927864.01201406.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 22.84 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 24.92. To use another comparison, its price-to-book ratio of 8.15 indicates a significant premium versus the S&P 500 average of 2.99 and a significant discount versus the industry average of 36.73. 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 20.09 Peers 22.84   NOC 15.24 Peers 16.87

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 18.30 Peers 20.85   NOC NM Peers 4.05

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.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NOC 8.15 Peers 36.73   NOC 17.32 Peers 24.24

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 1.75 Peers 1.67   NOC 4.17 Peers 5.58

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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