Northrop Grumman Corp

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NOC : NYSE : Industrial Goods
$218.35 -0.78 | -0.36%
Today's Range: 217.95 - 219.87
Avg. Daily Volume: 966,800
07/26/16 - 4:01 PM ET

Financial Analysis


NORTHROP GRUMMAN CORP's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. 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 decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 16.70% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)5956.05957.0
EBITDA ($mil)842.0879.0
EBIT ($mil)739.0780.0
Net Income ($mil)556.0484.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)1277.02646.0
Total Assets ($mil)23933.025266.0
Total Debt ($mil)6389.06528.0
Equity ($mil)5621.06748.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin25.1525.42
EBITDA Margin14.1314.75
Operating Margin12.4113.09
Sales Turnover0.980.95
Return on Assets8.617.81
Return on Equity36.6829.25
Debt Q1 FY16 Q1 FY15
Current Ratio1.151.35
Debt/Capital0.530.49
Interest Expense76.076.0
Interest Coverage9.7210.26


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)180.83195.11
Div / share0.80.7
EPS3.032.41
Book value / share31.0834.59
Institutional Own % n/a n/a
Avg Daily Volume967470.01142711.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 20.96 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 7.02 indicates a significant premium versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 9.94. 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 19.82 Peers 20.96   NOC 14.60 Peers 16.97

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.

 

Discount. 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 discount 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 18.18 Peers 18.28   NOC 6.65 Peers 2.24

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

NOC is trading at a premium to 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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NOC 7.02 Peers 9.94   NOC 15.65 Peers 3.18

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.

 

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

NOC is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
NOC 1.68 Peers 1.67   NOC -2.04 Peers 6.23

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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