Critical Review: Northrop Grumman Corporation (NOC) vs. DigitalGlobe (DGI)
Northrop Grumman Corporation (NYSE: NOC) and DigitalGlobe (NYSE:DGI) are both mid-cap aerospace companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.
This table compares Northrop Grumman Corporation and DigitalGlobe’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Northrop Grumman Corporation||9.20%||39.22%||8.74%|
Northrop Grumman Corporation pays an annual dividend of $4.00 per share and has a dividend yield of 1.5%. DigitalGlobe does not pay a dividend. Northrop Grumman Corporation pays out 30.6% of its earnings in the form of a dividend. DigitalGlobe has raised its dividend for 9 consecutive years.
This is a summary of recent recommendations for Northrop Grumman Corporation and DigitalGlobe, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Northrop Grumman Corporation||0||6||7||1||2.64|
Northrop Grumman Corporation presently has a consensus target price of $268.34, suggesting a potential upside of 0.49%. DigitalGlobe has a consensus target price of $33.90, suggesting a potential downside of 1.88%. Given Northrop Grumman Corporation’s stronger consensus rating and higher probable upside, equities analysts clearly believe Northrop Grumman Corporation is more favorable than DigitalGlobe.
Risk & Volatility
Northrop Grumman Corporation has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, DigitalGlobe has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.
Institutional and Insider Ownership
81.5% of Northrop Grumman Corporation shares are held by institutional investors. Comparatively, 96.3% of DigitalGlobe shares are held by institutional investors. 0.7% of Northrop Grumman Corporation shares are held by company insiders. Comparatively, 1.9% of DigitalGlobe shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Northrop Grumman Corporation and DigitalGlobe’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Northrop Grumman Corporation||$25.19 billion||1.85||$3.80 billion||$13.09||20.40|
|DigitalGlobe||$809.90 million||2.66||$402.60 million||$0.02||1,728.36|
Northrop Grumman Corporation has higher revenue and earnings than DigitalGlobe. Northrop Grumman Corporation is trading at a lower price-to-earnings ratio than DigitalGlobe, indicating that it is currently the more affordable of the two stocks.
Northrop Grumman Corporation beats DigitalGlobe on 11 of the 18 factors compared between the two stocks.
Northrop Grumman Corporation Company Profile
Northrop Grumman Corporation is a global security company. The Company provides products, systems and solutions in autonomous systems; cyber; command, control, communications and computers, intelligence, surveillance and reconnaissance (C4ISR); strike, and logistics and modernization. The Company’s segments include Aerospace Systems, Mission Systems and Technology Services. The Company’s Aerospace Systems segment is engaged in the design, development, integration and production of manned aircraft, autonomous systems, spacecraft, high-energy laser systems, microelectronics and other systems/subsystems. The Mission Systems segment offers mission solutions and multifunction systems for Department of Defense (DoD), intelligence community, international, federal civil and commercial customers. The Technology Services segment provides logistics solutions supporting the full life cycle of platforms and systems for global defense and federal-civil customers.
DigitalGlobe Company Profile
DigitalGlobe, Inc. is a provider of Earth imagery, data and analysis. The Company’s imagery solutions and other services support a range of uses, including mission-planning, mapping and analysis, environmental monitoring, oil and gas exploration and infrastructure management. The Company’s imagery solutions and other services are sourced from its own satellite constellation and third-party providers. The Company sells its products and services through a combination of direct and indirect channels, consisting of a global network of resellers, strategic partners and direct enterprise sales to its United States Government and Diversified Commercial customer groups. The Company offers products consisting of imagery from its constellation of satellites, and provides geospatial products and services. The Company processes its imagery to varying levels according to its customers’ specifications and delivers its products using the distribution method.
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