NOC is a Dividend Contender with a 12-year streak of dividend increases. The company pays quarterly dividends of 80¢ per share in the months of March, June, September and December. At the current share price of $200, the stock yields 1.60%.
Regular readers will know that I'm busy consolidating several portfolios containing my dividend paying stocks. These posts capture past transactions and dividend income, and I update projected annual dividend income (PADI) accordingly.
Today's transfer adds another new position to DivGro, so I now own 61 different stocks and funds.
Since completing the consolidation of my Scottrade and traditional IRA portfolio's, Ive been transferring stocks from my Roth IRA. Here's a summary of Roth IRA stocks transferred so far:
The 2 buys I'm transferring today are connected with red dashed lines. Average cost basis is $152.50, while yield on cost (YoC) averages to 1.70%. Despite the low yield, I'm happy with my investment in NOC!
|2014-01-03||Bought: 8 shares of NOC at $114.06 per share:||$||912.48|
|2014-03-19||Dividend on 7 shares at 61¢ per share:||$||4.88|
|2014-06-18||Dividend on 7 shares at 70¢ per share:||$||5.60|
|2014-09-17||Dividend on 7 shares at 70¢ per share:||$||5.60|
|2014-12-17||Dividend on 7 shares at 70¢ per share:||$||5.60|
|2015-03-18||Dividend on 7 shares at 70¢ per share:||$||5.60|
|2015-06-17||Dividend on 7 shares at 80¢ per share:||$||6.40|
|2015-09-16||Dividend on 7 shares at 80¢ per share:||$||6.40|
|2015-12-16||Dividend on 7 shares at 80¢ per share:||$||6.40|
|2016-02-19||Bought: 8 shares of NOC at $190.93 per share:||$||1,527.44|
|2016-03-16||Dividend on 14 shares at 80¢ per share:||$||12.80|
|Total Capital Invested||$||2,439.92|
|Total Dividends Received:||$||59.28|
With this transfer, DivGro's projected annual dividend income (PADI) increases by $51.20 and I'm adding $59.28 in past dividends to DivGro's total dividend income.
Ratings and Fair Value Estimates for NOC
|†combined Value/Growth/Momentum score|
Morningstar's fair value estimate of NOC is $176.00, whereas S&P Capital IQ calculates a fair value of $173.40. According to Tipranks, based on 4 ranked analysts offering 12-month price targets for NOC, the average price target is $210.25. Finally, using a Comparative Analysis based on EBITDA, courtesy of finbox.io, NOC has a fair value estimate of $189.69 (see below).
The average of these valuations is $187.34, which means NOC is trading at a premium of about 7% to fair value.
- The stock's 10-year dividend growth rate (DGR) is an impressive 13%! If we divide the 5-year DGR by the 10-year DGR, we get 1.02, which means the company is sustaining and slightly accelerating dividend increases. The most recent dividend increase was 14.3%.
- The payout ratio is low at about 30%. NOC has an aggressive share buyback program, which continues to bolster the stock price.
- NOC generates income from a diverse mix of aerospace and defense businesses.
- The company generates $2.5 billion in annual operating cash flow and should be able to withstand reasonable budget cuts.
- Value Line has a Financial Strength Rating of A++ and a Safety Rank of 1.