Northrop Grumman Corp's Dividend Analysis
Delving into the Dividend Dynamics of Northrop Grumman
Northrop Grumman Corp (NYSE:NOC) recently announced a dividend of $1.87 per share, payable on 2024-03-13, with the ex-dividend date set for 2024-02-23. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Northrop Grumman Corp's dividend performance and assess its sustainability.
What Does Northrop Grumman Corp Do?
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Northrop Grumman is a diversified defense contractor providing aeronautics, defense, and space systems. The company's aerospace segment creates the fuselage for the massive F-35 program and produces autonomous and piloted aircraft such as Global Hawk drones and the new B-21 bomber. Defense systems makes artillery and missile ammunition and guidance systems, missile defense systems, and conducts maintenance and upgrades on numerous military aircraft. Mission systems creates and integrates a variety of radar, navigation, and communication systems for avionics, weapons control, and countermeasures on a range of platforms from helicopters to destroyers. Finally, space systems produces satellites, sensors, space structures, and manufactures long-range missiles and rocket motors.
A Glimpse at Northrop Grumman Corp's Dividend History
Northrop Grumman Corp has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Northrop Grumman Corp has increased its dividend each year since 1997. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 27 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Northrop Grumman Corp's Dividend Yield and Growth
As of today, Northrop Grumman Corp currently has a 12-month trailing dividend yield of 1.61% and a 12-month forward dividend yield of 1.64%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Northrop Grumman Corp's annual dividend growth rate was 9.00%. Extended to a five-year horizon, this rate increased to 9.30% per year. And over the past decade, Northrop Grumman Corp's annual dividends per share growth rate stands at an impressive 12.10%.
Based on Northrop Grumman Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Northrop Grumman Corp stock as of today is approximately 2.51%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Northrop Grumman Corp's dividend payout ratio is 0.54.
Northrop Grumman Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Northrop Grumman Corp's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Northrop Grumman Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Northrop Grumman Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Northrop Grumman Corp's revenue has increased by approximately 5.60% per year on average, a rate that outperforms approximately 55.68% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Northrop Grumman Corp's earnings decreased by approximately -12.90% per year on average, a rate that outperforms approximately 31.05% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -2.60%, which outperforms approximately 30.47% of global competitors, indicates a potential for future stability and growth.
Concluding Insights on Northrop Grumman Corp's Dividend Profile
In conclusion, Northrop Grumman Corp's consistent dividend history, robust dividend growth rate, and prudent payout ratio paint a picture of a company committed to rewarding its shareholders. With a strong profitability rank and promising growth metrics, the company appears well-positioned to sustain its dividend payments. Investors considering Northrop Grumman Corp for its dividends would be wise to consider these factors, alongside the broader market and industry trends, to make a well-informed decision. Will Northrop Grumman Corp continue its legacy as a dividend aristocrat in the years to come?
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
