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Opinions David Burrows
Northrop GrummanNOCTOP PICKMay 23, 2017
David BurrowsStock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Defense is a moat oligopoly with barriers to entry. NOC owns long US Defence Dept. contracts and they own the intellectual property of their defence technology. They operate in 4 segments like space and defence which are predictable and stable. Revenues are stable; 86% of sales are with the US government. They have an $80 billion backlog. Shares pulled back 24% from last year's peaked, but have stabilized. They're grinding through a $1.2 billion cost overrun of the B-21 bomber, fixed-price contract. But a catalyst in 2024 is them likely getting the contract to build the next generation of fight jets. Shares offer returns of 13% compounded historically.
(Analysts’ price target is $489.88)
Brian Madden
European defence budgets rose after Russia invaded Ukraine. Also, NOC upgraded its B-21 bomber, upgraded its nuclear business as well as its space program. They buy back shares and consistently grow their dividend. Good management that benefits from steady government contracts.
(Analysts’ price target is $504.71)
Darren Sissons
David Fingold
David Burrows
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A $43 billion market value. In the fall, and leading up to November, there was a big run up in several sectors, one being the defence sector, with a view that there would be spending whether the Democrats or Republicans won. A lot of defence stocks have basically traded sideways for the last 4-5 months consolidating that initial gain. This is one of the companies that is trading very close to its highs. A big contractor in the strike bomber and the F35. They are the leader in drone technology. A Triton drone can replace 20 aircraft. Governments try to save money and they want what they can get from drone technology. They are now opened up to sell to the EU and Japan. Dividend yield of 1.6%. (Analyst’s price target is $260.)