Understanding the Dividend Dynamics of Northrop Grumman Corp
Northrop Grumman Corp (NOC, Financial) recently announced a dividend of $1.87 per share, payable on 2023-12-13, with the ex-dividend date set for 2023-11-24. 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?
Northrop Grumman is a diversified defense contractor providing aeronautics, defense, mission, 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 make artillery and missile ammunition and guidance systems, missile defense systems, and conduct maintenance and upgrades on numerous military aircraft. Mission systems create and integrate 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 produce satellites, sensors, space structures, and manufacture 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, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 1997, earning it the prestigious title of a dividend aristocrat. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Northrop Grumman Corp's Dividend Yield and Growth
As of today, Northrop Grumman Corp's 12-month trailing dividend yield is 1.52%, with a 12-month forward dividend yield of 1.58%, indicating expected dividend increases over the next year. Over the past three years, the company's annual dividend growth rate was 9.40%, which increased to 11.00% per year over a five-year span, and an impressive 12.60% over the past decade. The 5-year yield on cost for Northrop Grumman Corp stock is approximately 2.56%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is crucial for assessing dividend sustainability. As of 2023-09-30, Northrop Grumman Corp's dividend payout ratio is 0.24, indicating a healthy balance between distributing earnings and retaining funds for growth. The company's profitability rank is 9 out of 10, reflecting strong earnings potential. Consistent positive net income over the past decade underscores this high profitability.
Growth Metrics: The Future Outlook
Northrop Grumman Corp's robust growth rank of 9 out of 10 suggests a solid growth trajectory. The company's revenue per share and 3-year revenue growth rate of 5.70% per annum outperform approximately 59.77% of global competitors. Northrop Grumman Corp's 3-year EPS growth rate of 6.40% per annum and its 5-year EBITDA growth rate of 8.60% also outpace many competitors, reinforcing its dividend sustainability.
Concluding Insights
In conclusion, Northrop Grumman Corp's consistent dividend payments, robust dividend growth rate, prudent payout ratio, and strong profitability and growth metrics offer a compelling case for value investors. The company's commitment to shareholder returns, coupled with its strategic positioning in the defense sector, positions it as a potentially attractive investment for those seeking steady income through dividends. Investors contemplating the addition of a defense sector stock to their portfolios would do well to consider Northrop Grumman Corp's dividend profile. Will Northrop Grumman Corp continue its dividend aristocrat streak and reward investors 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.
