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Northrop Grumman Corporation (NOC) vs RTX Corporation (RTX)

Northrop Grumman Corporation and RTX Corporation are both Aerospace & Defense companies. RTX Corporation is the larger, with a market value of $252.0B against $71.0B — 3.5× the size. Northrop Grumman Corporation trades at the lower P/E: 16.5× against 33.7×. RTX Corporation grew revenue faster over the last twelve months: 11.8% against 5.90%. Northrop Grumman Corporation has the higher net margin (10.5% vs 8.28%) and the higher return on invested capital (9.58% vs 6.74%). Both pay a dividend; Northrop Grumman Corporation yields more (1.84% vs 1.45%). Across the 23 metrics below, Northrop Grumman Corporation leads on 15 and RTX Corporation on 8.

Valuation

Metric NOC RTX Aerospace & Defense median
P/E 16.48 33.73 31.81
P/S 1.72 2.80 3.55
P/B 4.13 3.85 2.59
Price to free cash flow 20.26 23.84 31.99
EV/EBITDA 14.05 19.55 18.08
EV/Sales 2.00 3.11 3.37
Earnings yield 6.07% 2.97% 1.38%
Free cash flow yield 4.94% 4.19% 0.21%

Profitability

Metric NOC RTX Aerospace & Defense median
Gross margin 20.06% 20.35% 25.48%
Operating margin 10.72% 11.21% 4.54%
Net margin 10.48% 8.28% 2.22%
Free cash flow margin 8.50% 11.75% 1.43%
Return on equity 26.96% 11.70% 6.43%
Return on assets 8.97% 4.54% 2.70%
Return on invested capital 9.58% 6.74% 1.56%

Growth

Metric NOC RTX Aerospace & Defense median
Revenue growth (TTM) 5.90% 11.84% 18.43%
EPS growth (last fiscal year) 2.61% 39.72% 24.27%
Revenue growth, 5-year CAGR 2.66% 9.38% 9.73%
Net income growth, 5-year CAGR 5.57% 0.00% 0.00%

Health

Metric NOC RTX Aerospace & Defense median
Debt to equity 0.81 0.55 0.24
Current ratio 1.17 1.01 2.72
Net debt to EBITDA 1.80 2.23 1.12

Dividend

Metric NOC RTX Aerospace & Defense median
Dividend yield 1.84% 1.45% 0.90%
Payout ratio 0.30 0.50 0.32

Size

Metric NOC RTX Aerospace & Defense median
Market cap 70.98b 251.96b 2.19b

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