June 20, 2025 a 12:46 pm
NOC: Dividend Analysis - Northrop Grumman Corporation
Northrop Grumman Corporation showcases a solid dividend profile with a long history of payments without cuts, reflecting a strong commitment to returning value to shareholders. The steady growth observed in recent years indicates robust financial health, supported by a reasonable payout ratio. However, attention to its leverage and free cash flow should be maintained for future dividend sustainability.
📊 Overview
| Indicator | Details |
|---|---|
| Sector | Aerospace & Defense |
| Dividend yield | 1.76% |
| Current dividend per share | $8.07 USD |
| Dividend history years | 44 years |
| Last cut or suspension | None |
📈 Dividend History
The dividend history of Northrop Grumman Corporation signifies consistent and reliable returns to investors over the years. This track record of stability is a vital consideration for long-term investors seeking predictable income streams.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | $4.37 |
| 2024 | $8.05 |
| 2023 | $7.34 |
| 2022 | $6.76 |
| 2021 | $6.16 |
📉 Dividend Growth
Analysing the paid dividends over several years provides insights into the company's growth potential and investor confidence. A steady growth trend further solidifies trust in the company’s financial stability.
| Time | Growth |
|---|---|
| 3 years | 9.33% |
| 5 years | 9.30% |
The average dividend growth is 9.30% over 5 years. This shows moderate but steady dividend growth.
🗣️ Payout Ratio
The payout ratio is a critical measure of dividend sustainability, showing the proportion of earnings and cash flow allocated to dividends. Northrop Grumman maintains a moderate payout, indicative of balanced capital allocation.
| Key figure | Ratio |
|---|---|
| EPS-based | 31.44% |
| Free cash flow-based | 65.38% |
A 31.44% EPS-based and a 65.38% FCF-based payout ratio reflect a prudent dividend policy, capable of weathering financial volatilities while sustaining shareholder returns.
💰 Cashflow & Capital Efficiency
Northrop Grumman's cash flow efficiency is testament to its operational prowess. By dissecting FCF and operational investments, we gauge liquidity and long-term sustainability, crucial for ongoing dividend mandates.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.80% | 2.96% | 1.73% |
| Earnings Yield | 6.05% | 2.90% | 5.79% |
| CAPEX to Operating Cash Flow | 40.27% | 45.81% | 49.47% |
| Stock-based Compensation to Revenue | 0.25% | 0.22% | 0.27% |
| Free Cash Flow / Operating Cash Flow Ratio | 59.73% | 54.19% | 50.53% |
The cash flow assessment portrays Northrop Grumman as maintaining solid liquidity, ensuring capacity to fund dividends. However, careful watch of FCF volatility is advised.
⚠️ Balance Sheet & Leverage Analysis
Solid financial structures underpin dividend reliability. Evaluating leverage and liquidity assists in understanding Northrop Grumman's risk profile and capacity to meet obligations.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.08 | 1.06 | 0.96 |
| Debt-to-Assets | 33.41% | 33.68% | 33.60% |
| Debt-to-Capital | 51.89% | 51.45% | 48.98% |
| Net Debt to EBITDA | 1.73 | 2.97 | 1.58 |
| Current Ratio | 1.01 | 1.15 | 1.08 |
| Quick Ratio | 0.91 | 1.05 | 0.99 |
| Financial Leverage | 3.22 | 3.15 | 2.86 |
With consistent leverage ratios, Northrop Grumman exhibits resilient financial strength. Vigilance over debt servicing remains essential for maintaining this liquidity.
✅ Fundamental Strength & Profitability
Examining profitability and operational efficiency underlines Northrop Grumman's capability to sustain dividends while reinforcing value creation for shareholders.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 27.30% | 13.90% | 31.97% |
| Return on Assets | 8.46% | 4.42% | 11.19% |
| Margins: Net | 10.17% | 5.23% | 13.38% |
| EBIT | 13.74% | 7.36% | 17.33% |
| EBITDA | 17.08% | 10.76% | 20.99% |
| Gross | 20.38% | 16.67% | 20.42% |
| Research & Development to Revenue | 2.68% | 3.05% | 3.28% |
Profitable margins and returns indicate Northrop Grumman's adeptness in extracting value, with consistent reinvestment in R&D promising further innovation and market competitiveness.
🚀 Price Development
🗞️ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 4/5 | |
| Dividend Stability | 5/5 | |
| Dividend Growth | 3/5 | |
| Payout Ratio | 5/5 | |
| Financial Stability | 4/5 | |
| Dividend Continuity | 5/5 | |
| Cashflow Coverage | 3/5 | |
| Balance Sheet Quality | 4/5 |
Total Score: 33/40
🌟 Rating
Northrop Grumman Corporation earns a solid investment rating, underpinned by its stable dividend history, prudent payout ratios, and robust financial metrics. Continued focus on debt management and cash flow efficiency will be key to sustaining its dividend accolades in a dynamic market landscape.