Stock fact sheet · data as of
Northrop Grumman Corporation (NOC): fair value, margin of safety and Wheel Score
Industrials · Aerospace & Defense · United States · Defensive
Is NOC undervalued?
At 499.63 (close of 16 Oct 2026), NOC trades 11% over the GLS average fair value of 449.01. 4 of the 9 models land above the price and 5 below. A negative margin of safety costs Value points in the Wheel Score (8 of 25 here) - the models see no discount, which does not make the business a poor one, only the price a full one.
The 9 models disagree widely: DDM gives 140.67 while DCF gives 834.51. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files NOC under Defensive: a low beta, a dividend and positive earnings.
Nine valuation models for NOC
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 834.51 | +67% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 299.32 | -40% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 670.81 | +34% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 208.56 | -58% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 266.55 | -47% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 681.29 | +36% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 587.85 | +18% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 140.67 | -72% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 351.55 | -30% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -138.00 | -128% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 595.69 | +19% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
On financial health NOC scores 8/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is 6.9 out of 10: a ten-year record that is consistent in some of the metrics the score tracks (revenue, earnings, margins, cash flow, returns on capital) and patchy in others.
Returns on capital are moderate - ROIC 11.5%, ROE 25.1%, ROA 8.1% - with debt at 1.18 times equity and a free-cash-flow yield of 5.1%.
The dividend yield is 1.91% at a payout ratio of 30%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Aeronautics Systems 30%, Mission Systems 28%, Space Systems 24% (quarter Q2 FY2026).
Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 10/10 on the GLS smart-money scales.
| Piotroski F-score | 8 / 9 | ROIC | 11.5% |
|---|---|---|---|
| GLS Moat | 6.9 / 10 | ROE | 25.1% |
| Debt / equity | 1.18 | ROA | 8.1% |
| Free-cash-flow yield | 5.1% | Payout ratio | 30% |
| Institutions | 10 / 10 | Insiders · Congress | 1 · 10 / 10 |
Wheel Score 72: Good
NOC scores 72 out of 100 on the Wheel Score (Good band, 65-79). The score blends the margin of safety (Value, 8/25), Piotroski health (18/20), the GLS moat (10/15), the option premium on offer (18/20) and how easily the stock trades (19/20). Value (8/25) is the part holding the score back.
Implied volatility is 33% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (18 of 20 points). Chain open interest is 27,622 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 1.3M shares a day on a market cap of $71.0B, with a beta of -0.11 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 19 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 8 / 25 | -11% margin of safety | |
| Health | 18 / 20 | Piotroski 8/9 | |
| Moat | 10 / 15 | moat 6.9/10 | |
| Premium | 18 / 20 | implied volatility 33% | |
| Stability | 19 / 20 | 1.3M shares/day, $71.0B cap, beta -0.11 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
Northrop Grumman Corporation reports earnings on 20 Oct 2026 (before the open) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Aerospace & Defense
The 12 companies below are the closest to Northrop Grumman Corporation by market cap within the Aerospace & Defense industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| TDG TransDigm Group Incorporated | 1,109.77 | 1,238.79 | +10% | 75Good | $61.3B |
| HWM Howmet Aerospace Inc. | 219.75 | 111.60 | -97% | 68Good | $87.6B |
| GD General Dynamics Corporation | 337.03 | 286.36 | -18% | 66Good | $91.2B |
| HONA Honeywell Aerospace Inc | 163.11 | 69.57 | -134% | 45Weak | $51.7B |
| LHX L3Harris Technologies, Inc. | 240.50 | 226.04 | -6% | 76Good | $44.8B |
| HEI-A HEICO Corporation | 231.34 | 133.81 | -73% | 39No options | $43.0B |
| HEI HEICO Corporation | 308.64 | 155.07 | -99% | 58Fair | $43.0B |
| LMT Lockheed Martin Corporation | 532.64 | 439.20 | -21% | 67Good | $122.9B |
| RKLB Rocket Lab USA, Inc. | 59.18 | - | - | 45Weak | $35.4B |
| ESLT Elbit Systems Ltd. | 741.61 | 363.05 | -104% | 62Fair | $34.8B |
| AXON Axon Enterprise, Inc. | 417.19 | 66.90 | -524% | 49Weak | $33.9B |
| BA The Boeing Company | 188.73 | 78.41 | -141% | 54Fair | $149.2B |
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Start free See the Sunday ScanQuestions about NOC
Is NOC undervalued right now?
No: at 499.63 the stock trades 11% above the GLS average fair value of 449.01 (data as of 16 Oct 2026). The margin of safety is negative.
What is the Wheel Score of NOC and what does it mean?
NOC scores 72 out of 100 (Good). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for NOC?
449.01 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Northrop Grumman Corporation report earnings next?
The next earnings report is due on 20 Oct 2026 (before the open), 4 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does NOC have listed options, and how liquid are they?
Yes. The nightly snapshot found 1,000 listed contracts with 27,622 open interest across all expiries and implied volatility of 33% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.