Northrop Grumman Corporation (NOC) vs Transdigm Group Incorporated (TDG)

Northrop Grumman Corporation and Transdigm Group Incorporated are both Aerospace & Defense companies. Northrop Grumman Corporation is the larger, with a market value of $72.4B against $61.3B — 1.2× the size. Northrop Grumman Corporation trades at the lower P/E: 16.2× against 33.9×. Transdigm Group Incorporated grew revenue faster over the last twelve months: 16.7% against 5.90%. Transdigm Group Incorporated has the higher net margin (19.1% vs 10.5%) and the higher return on invested capital (14.3% vs 9.58%). Across the 21 metrics below, Transdigm Group Incorporated leads on 11 and Northrop Grumman Corporation on 10.

Valuation

Metric NOC TDG Aerospace & Defense median
P/E 16.19 33.87 33.00
P/S 1.69 6.40 3.63
P/B 4.06 n/m 3.24
Price to free cash flow 19.90 33.25 34.01
EV/EBITDA 13.83 18.69 18.69
EV/Sales 1.97 9.40 3.94
Earnings yield 6.18% 2.95% 1.31%
Free cash flow yield 5.03% 3.01% 0.00%

Profitability

Metric NOC TDG Aerospace & Defense median
Gross margin 20.06% 59.56% 25.48%
Operating margin 10.72% 46.04% 4.54%
Net margin 10.48% 19.09% 2.22%
Free cash flow margin 8.50% 19.25% 0.00%
Return on equity 26.96% (25.83%) 6.43%
Return on assets 8.97% 7.73% 2.70%
Return on invested capital 9.58% 14.27% 1.56%

Growth

Metric NOC TDG Aerospace & Defense median
Revenue growth (TTM) 5.90% 16.66% 18.43%
EPS growth (last fiscal year) 2.61% 25.21% —
Revenue growth, 5-year CAGR 2.66% 11.59% 9.62%
Net income growth, 5-year CAGR 5.57% 29.42% 0.00%

Health

Metric NOC TDG Aerospace & Defense median
Debt to equity 0.81 (3.34) 0.24
Current ratio 1.17 3.02 2.72
Net debt to EBITDA 1.80 5.85 1.12

Dividend

Metric NOC TDG Aerospace & Defense median
Dividend yield 1.73% — 1.04%
Payout ratio 0.23 0.00 0.00

Size

Metric NOC TDG Aerospace & Defense median
Market cap 72.35b 61.30b 2.52b

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