Northrop Grumman Stock Rises on Strong Profits and Growth Outlook Despite Expected Slowdown
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Northrop Grumman's (NOC) stock price has risen 7.8% over the past 3 months. The company has strong financials, including a high 29% return on equity (ROE) over the past year.
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NOC's high ROE indicates it efficiently generates profits from shareholder investments. The company reinvests most profits to fuel earnings growth rather than paying dividends.
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NOC has achieved modest 14% net income growth over the past 5 years, exceeding the industry average growth of 5.4%. Its high ROE and profit retention support growth.
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Analysts forecast NOC's future payout ratio to rise to 31% over the next 3 years, meaning it will pay out more profits as dividends. Its ROE is expected to decline to 23% over the same period.
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NOC's impressive past earnings growth is expected to slow down going forward according to the latest analyst forecasts. Investors should evaluate whether this outlook is priced into NOC's stock valuation.