NOC Investment Analysis Report & Stock Research, Northrop Grumman Corp.

Northrop Grumman Corporation (NOC)

NOC Stock Report

2-Year Price History

View Larger NOC Chart
NYSE:NOC
$59.70
(2/9 2:43PM)
+3.0%
Open$58.57 Mkt Cap$18.2 Billion
High$59.77 52Wk High$60.39
Low$58.18 52Wk Low$33.81
Volume1.8 Million Avg Vol 10D2.9 Million

Ockham's Rating/Recommendation Summary

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NOC Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at NOC through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 0.83x and 0.57x respectively.

Utilizing this range we can see that NOC’s current Price to Sales per share ratio of 0.54x is significantly below its average levels historically. In fact, with a current price of $57.66, NOC is a full 23% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for NOC.

NOC Cash Earnings

When reviewing a company and their prospects for success, it is necessary to analyze their ability to generate positive Cash Earnings. This is a vital component to our analysis, because as a long term investment research firm, there are few factors more closely tied to the valuation of a company as Cash Earnings. In the case of NOC, it appears that either the current estimate for Cash Earnings is negative or NOC is not likely to generate positive Cash Earnings based upon their prior performance in the last several quarters. Remember that Cash Earnings is not the only way to value a company's potential, but in our analysis it is the most important. Thus, for our analysis NOC receives a negative score from a Cash perspective. At Ockham, we are fond of saying "Cash is King," and in this case the company is not generating any. If a company is not able to generate a profit then there is no reason to invest in them. Unless of course you believe in the story, and hope it will eventually lead to a profitable enterprise.

NOC Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.

Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from NOC against the historic high and low levels over an available data range. Because NOC has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In NOC’s case, the estimated annual dividend is $1.72 producing a current dividend yield of 2.98%. The highest dividend yield from NOC in recent history was 5.09% while the lowest dividend yield was 1.18%. NOC is not making us feel all that confident when their current dividend yield is below the historical median by 4.94%.

Peer Comparison

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Northrop Grumman Corp. Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including NOC) 9.36 5.25 » 32.28 1.01 0.53 » 1.88 11.92% 21.77%
*10 year range does not include current year values
Honeywell International, Inc. HON $28.1 Billion $36.87 9.23 4.63 » 77.26 0.93 0.44 » 1.90 9.61% 22.60%
General Dynamics Corp. GD $25.6 Billion $66.35 8.77 4.64 » 21.38 0.80 0.45 » 1.75 12.01% 19.20%
Raytheon Company RTN $20.2 Billion $52.79 8.99 5.59 » 25.13 0.84 0.56 » 1.32 5.06% 12.46%
Northrop Grumman Corp. NOC $18.2 Billion $57.97 -1.00 7.87 » 17.36 0.54 0.33 » 1.44 5.28% 6.80%
L-3 Communications Holdings Inc LLL $9.8 Billion $84.60 8.12 5.51 » 19.15 0.63 0.46 » 1.64 24.10% 11.96%
Rockwell Collins, Inc. COL $8.2 Billion $52.23 11.68 5.87 » 18.45 1.87 0.77 » 2.80 8.81% 42.64%
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The most recent Stocks on Financial TV & Blogs from impactful financial news sources
Zero Hedge

Zero Hedge Discussed the Latest Development of Northrop Grumman Corporation

Northrop Grumman Corporation is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Zero Hedge.

Northrop Grumman Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; NOC has received less coverage from the financial media in business television and blogs.

“… NORTHROP GRUMMAN posts Q4 profit of $413M, amid absence of charges. Reynolds American's Q4 net falls 17% amid declining volume, higher pension cost. …”

Imus In The Morning

Imus In The Morning: Discussion of NOC's Earnings

In our methodology at Ockham we weight earnings performance heavily, so we always pay attention to earnings news coming from legitimate sources like Imus In The Morning.

Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Northrop Grumman Corporation has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on NOC because it trades within the price range that we would expect given current market conditions and fundamentals.

“… NORTHROP GRUMMAN reporting this hour, defense contractor reporting earnings of 1. 19 a share for the fourth quarter. Revenue at 8. 9 billion. …”

Power Lunch

Emerging Markets and NOC Covered on Power Lunch

News related to emerging markets affecting Northrop Grumman Corporation today, and Power Lunch discussed some recent developments.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Northrop Grumman Corporation has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on NOC because it trades within the price range that we would expect given current market conditions and fundamentals. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards NOC and think that it will generally perform in-line with the S&P 500.

“… They went after 30 other corporations, including dow, NORTHROP GRUMMAN, juniper, after trade secrets and technology. Are we going to trade with a country that basically is ... …”

The Call

NOC in Developing Markets on The Call

Northrop Grumman Corporation and an emerging market growth strategy were discussed recently on NOC.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, NOC has been less covered in the news compared to the rest of our universe of stocks. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Northrop Grumman Corporation will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on NOC.

“… It's about a cyber attack on over 30 american companies that include dow chemical and NORTHROP GRUMMAN, juniper networks and so on. > > …”

Power Lunch

Power Lunch: Topics Include Emerging Markets and NOC

Northrop Grumman Corporation and an emerging market growth strategy were discussed recently on NOC.

Ranking all stocks in terms of news coverage offers some interesting data. In the case of NOC, it is getting significantly more attention in recent news coverage than we are used to seeing. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. Northrop Grumman Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals.

“… Obviously, they should have been able to anticipate that they were going to be attacked, there have been studies for a number of years, NORTHROP GRUMMAN did a study last year on ... …”

Power Lunch

See More News on NOC from Power Lunch

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Northrop Grumman Corporation.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, NOC has been less covered in the news compared to the rest of our universe of stocks. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Northrop Grumman Corporation will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on NOC.

“… Including engine and power generators, the company cummins, NORTHROP GRUMMAN up nearly 50% > > u. P. S. Announcing it's e eliminateing 1800 jobs. Lifting u. P. S. …”

Squawk On The Street

A Discussion of Technicals and Northrop Grumman Corporation on Squawk On The Street

Traders that are interested in technicals more than fundamentals will want to pay attention to the latest news on Northrop Grumman Corporation from Squawk On The Street.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, NOC has been less covered in the news compared to the rest of our universe of stocks. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Northrop Grumman Corporation will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on NOC.

“… This is the same week defense titan NORTHROP GRUMMAN announced it is moving its corporate headquarters out of los angeles, of its jobs will stay here. …”

Imus In The Morning

The Outlook for Emerging Markets and Northrop Grumman Corporation Discussed on Imus In The Morning

For growth, there is nowhere growing more rapidly than emerging markets. Recently, Imus In The Morning talked about emerging markets and their impact on Northrop Grumman Corporation.

Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Northrop Grumman Corporation will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on NOC. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, NOC has been less covered in the news compared to the rest of our universe of stocks.

“… NORTHROP GRUMMAN moving headquarters from l. A. To the washington d. C. Area. The company saying it wants to be closer to the major government customers. …”

Imus In The Morning

Emerging Markets and NOC Covered on Imus In The Morning

Northrop Grumman Corporation and an emerging market growth strategy were discussed recently on NOC.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Northrop Grumman Corporation has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on NOC because it trades within the price range that we would expect given current market conditions and fundamentals. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards NOC and think that it will generally perform in-line with the S&P 500.

“… NORTHROP GRUMMAN in the news, moving the corporate headquarters from los angeles to the washington, d. C. Area. The company saying it wanted to be closer to the major ... …”

Imus In The Morning

The Outlook for Emerging Markets and Northrop Grumman Corporation Discussed on Imus In The Morning

There is no doubt that the emerging markets are where the growth is right now. The latest news mention of NOC on Imus In The Morning was in relation to emerging markets.

The Ockham valuation currently has a Fairly Valued stance on NOC because it trades within the price range that we would expect given current market conditions and fundamentals. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards NOC and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Northrop Grumman Corporation has actually sunk a bit in comparison to the others.

“… In auto sales, NORTHROP GRUMMAN moving the corporate headquarters from los angeles to the washington, d. C. Area and be closer to the major government customers and the ... …”

View All Northrop Grumman Corp. Stock News

Key Fundamentals

NOC - Northrop Grumman Corporation Fundamentals
Price (2/9 2:43PM) $59.70
Volume (2/9 2:43PM) 1.8 Million
Last Close Price $57.97
10 Day Average Volume 2.9 Million
13 Week Price Range $53.90 - $60.39
52 Week Price Range $33.81 - $60.39
LTM Revenue $33.8 Billion
 
Shares Outstanding (12/2009) 313.8 Million
Market Capitalization $18.2 Billion
Shares Held By Institutions 284.5 Million
Institutional Holders 707
% Shares Held By Institutions 89.40%
Earnings Per Share (EPS) $5.21
P/E Ratio 11.10
Book Value Per Share $39.61
 
Gross Margin 19.40%
Annual Dividend 1.72
Dividend Yield 3.00%
Beta 1.02
Fiscal Year Ends December

About Northrop Grumman Corp.

Northrop Grumman Corporation is considered to operate in the Industrial Goods sector. They specifically operate in the Aerospace - Defense- Products/Services business segment contained within the Aerospace/Defense industry.

The Company provides technologically advanced, innovative products, services, and integrated solutions in information and services, aerospace, electronics, and shipbuilding to its global customers.