Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Northrop Grumman Corp. pages available for free this week:
- Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
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Current Valuation Ratios
Northrop Grumman Corp., current price multiples
| Northrop Grumman Corp. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | Capital Goods | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Current share price (P) | |||||||||||||
| No. shares of common stock outstanding | |||||||||||||
| Growth rate (g) | |||||||||||||
| Earnings per share (EPS) | |||||||||||||
| Next year expected EPS | |||||||||||||
| Operating profit per share | |||||||||||||
| Sales per share | |||||||||||||
| Book value per share (BVPS) | |||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||
| Price to earnings (P/E) | |||||||||||||
| Price to next year expected earnings | |||||||||||||
| Price-earnings-growth (PEG) | |||||||||||||
| Price to operating profit (P/OP) | |||||||||||||
| Price to sales (P/S) | |||||||||||||
| Price to book value (P/BV) | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Northrop Grumman Corp., historical price multiples
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Price to Earnings (P/E) Ratio
- The P/E ratio exhibited considerable fluctuation throughout the five-year period. It started at 14.48 in 2018, sharply increased to a peak of 28.7 in 2019, followed by a significant decline to 15.32 in 2020 and a further drop to its lowest point of 8.33 in 2021. In 2022, the ratio rose again to 13.86. This pattern suggests changing market perceptions of earnings growth potential or variations in earnings themselves, with a notable correction after the 2019 spike.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio showed a generally moderate variability with some volatility. It increased from 12.37 in 2018 to 16.26 in 2019, then declined to 12.02 in 2020 and further to 10.33 in 2021, before increasing markedly to 18.85 in 2022. The sharp rise in 2022 contrasts with the previous downward trend, indicating either a perceived increase in market valuation relative to operating profits or a decrease in operating profits relative to price.
- Price to Sales (P/S) Ratio
- The P/S ratio demonstrated relative stability with moderate fluctuations. It gradually increased from 1.55 in 2018 to 1.91 in 2019, dipped to 1.33 in 2020, then rose again to 1.64 in 2021 and further to 1.85 in 2022. This indicates that the market valuation compared to sales experienced some volatility but maintained an overall upward trend after 2020.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio showed a declining trend over the five-year span. It started at 5.71 in 2018, peaked at 7.32 in 2019, and then consistently decreased: 4.62 in 2020, 4.52 in 2021, and 4.43 in 2022. The steady decline after 2019 indicates that the market price relative to the book value of equity became less elevated, implying adjustments in market valuation or improvements in book value.
Price to Earnings (P/E)
Northrop Grumman Corp., historical P/E calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net earnings (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/E Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/E Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
EPS = Net earnings ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Northrop Grumman Corp. Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited considerable volatility over the five-year period. It increased significantly from $275.55 at the end of 2018 to a peak of $384.87 by the end of 2019. This was followed by a decline to $293.03 in 2020. The share price then recovered strongly in 2021 to $373.99 and continued to rise to $443.47 by the end of 2022, indicating an overall upward trend despite intermittent fluctuations.
- Earnings Per Share (EPS)
- The EPS showed notable fluctuations as well. It started at $19.02 in 2018 and decreased to $13.41 in 2019. Subsequently, EPS rebounded sharply to $19.13 in 2020 and surged dramatically to $44.87 in 2021, marking the highest value in the observed period. However, EPS declined to $31.99 in 2022, still maintaining a level significantly higher than the initial years. This pattern reveals a substantial growth in profitability during 2020 and 2021, followed by a partial decrease in 2022.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio reflected the interplay between share price and earnings dynamics, showing a rising trend from 14.48 in 2018 to 28.7 in 2019, indicating higher investor expectations or valuation relative to earnings. In 2020, the ratio dropped to 15.32 coinciding with the EPS recovery and share price decline. It further decreased to 8.33 in 2021, the lowest point in the period, corresponding with the highest EPS and a strong share price. In 2022, the P/E ratio increased again to 13.86, reflecting the EPS decline and continued share price appreciation.
Price to Operating Profit (P/OP)
Northrop Grumman Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/OP Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/OP Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Northrop Grumman Corp. Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited volatility across the five-year period. Starting at $275.55 in 2018, it increased significantly to $384.87 in 2019. The price then decreased to $293.03 in 2020 before rebounding sharply to $373.99 in 2021 and reaching its highest point of $443.47 in 2022. The overall trend shows a strong upward movement despite some fluctuations.
- Operating Profit Per Share (OPPS) Trend
- The operating profit per share showed gradual growth from 2018 through 2020, increasing from $22.27 to $24.38. In 2021, there was a notable surge to $36.20, representing a significant increase in operating profitability. However, in 2022, OPPS declined to $23.53, returning close to the earlier levels before 2021, which may suggest a normalization or downturn in operational efficiency or profitability.
- Price to Operating Profit (P/OP) Ratio Trend
- The P/OP ratio experienced considerable fluctuations over the period. It started at 12.37 in 2018 and peaked at 16.26 in 2019 despite the increase in OPPS, indicating a relative premium on the share price. The ratio then decreased to 12.02 in 2020 and further to its lowest point of 10.33 in 2021, coinciding with the peak in operating profit per share. In 2022, the ratio rose sharply to 18.85, reflecting a higher market valuation relative to operating profit, likely influenced by the combination of a high share price and the reduced operating profit per share.
- Overall Insights
- The company experienced variable operating profitability with a peak in 2021, followed by a decline in 2022. Market valuation, as expressed by the share price and P/OP ratio, moved independently at times, suggesting external factors influencing investor sentiment. The elevated P/OP in 2022 points to higher expectations or optimism in the market despite the drop in operating profit per share, which may warrant further investigation into market conditions or company-specific developments during that year.
Price to Sales (P/S)
Northrop Grumman Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Sales (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/S Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/S Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Sales per share = Sales ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Northrop Grumman Corp. Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share price
- The share price exhibited notable volatility over the period analyzed. Starting at $275.55 in 2018, it increased significantly to $384.87 in 2019, followed by a decline to $293.03 in 2020. Subsequently, the share price recovered, rising to $373.99 in 2021 and further increasing to $443.47 in 2022. Overall, the share price demonstrated a strong upward trajectory from 2018 to 2022 despite the interim dip.
- Sales per share
- Sales per share showed a consistent upward trend throughout the entire period. It increased from $177.30 in 2018 to $239.15 in 2022, reflecting steady growth in revenue generation on a per-share basis. The growth rate appeared relatively stable, with incremental yearly increases indicating continuous expansion or improved efficiency.
- Price-to-Sales (P/S) Ratio
- The P/S ratio fluctuated during the period under review. It started at 1.55 in 2018, increased to a peak of 1.91 in 2019, then dropped to 1.33 in 2020. Afterward, it rose again to 1.64 in 2021 and further to 1.85 in 2022. These variations suggest changing market perceptions relative to sales, with a notable dip in 2020 potentially reflecting market uncertainty or valuation adjustments following the sales and share price dynamics in that year.
Price to Book Value (P/BV)
Northrop Grumman Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/BV Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/BV Ratio, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
BVPS = Shareholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Northrop Grumman Corp. Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price experienced notable volatility over the five-year period. It increased significantly from $275.55 in 2018 to a peak of $384.87 in 2019, followed by a decline to $293.03 in 2020. Subsequently, it rebounded in 2021 to $373.99 and continued its upward trajectory to reach $443.47 in 2022, marking the highest value reported in the period.
- Book Value Per Share (BVPS)
- The book value per share showed a consistent and steady increase throughout the period. Starting at $48.23 in 2018, it rose each year, reaching $52.61 in 2019, $63.45 in 2020, $82.80 in 2021, and $100.04 in 2022. This indicates a growing net asset value on a per-share basis over the timeframe analyzed.
- Price-to-Book Value Ratio (P/BV)
- The price-to-book value ratio demonstrated a decreasing trend, suggesting a reduction in market valuation relative to the book value over time. It started at 5.71 in 2018, peaked at 7.32 in 2019, then declined sharply to 4.62 in 2020. The ratio saw marginal decreases thereafter, moving to 4.52 in 2021 and 4.43 in 2022. This decline implies that, despite fluctuations and growth in share price, the market price became more aligned with the book value during these years.