Northrop Grumman Corp

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NOC : NYSE : Industrial Goods
$211.93 | %
Today's Range: 211.12 - 214.72
Avg. Daily Volume: 930,700
08/26/16 - 4:02 PM ET

Financial Analysis


NORTHROP GRUMMAN CORP's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. NORTHROP GRUMMAN CORP has weak liquidity. Currently, the Quick Ratio is 0.91 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 7.94% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)6000.05896.0
EBITDA ($mil)903.0930.0
EBIT ($mil)797.0813.0
Net Income ($mil)517.0531.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1139.01907.0
Total Assets ($mil)24081.024552.0
Total Debt ($mil)6390.06527.0
Equity ($mil)5681.06171.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin25.3826.65
EBITDA Margin15.0515.77
Operating Margin13.2813.79
Sales Turnover0.980.97
Return on Assets8.58.12
Return on Equity36.0432.31
Debt Q2 FY16 Q2 FY15
Current Ratio1.131.25
Debt/Capital0.530.51
Interest Expense74.075.0
Interest Coverage10.7710.84


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)178.96188.38
Div / share0.90.8
EPS2.852.74
Book value / share31.7532.76
Institutional Own % n/a n/a
Avg Daily Volume909346.0992880.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 24.28 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 6.87 indicates a significant premium versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 27.77. The price-to-sales ratio is below both the S&P 500 average and the industry average, indicating a discount. 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 19.62 Peers 24.28   NOC 14.43 Peers 17.34

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.

 

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 18.97 Peers 19.37   NOC 3.19 Peers 1.87

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NOC 6.87 Peers 27.77   NOC 12.43 Peers 161.87

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 1.65 Peers 1.69   NOC -1.01 Peers 3.82

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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