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Northrop Grumman vs Lockheed Martin
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Comparative Analysis
NOC wins this head-to-head comparison against LMT, driven by superior profitability and a more attractive valuation. While LMT shows stronger revenue growth, NOC's higher net profit margin and return on equity, coupled with a lower P/E ratio, present a more compelling investment case. NOC's recent earnings performance also demonstrates a consistent ability to beat analyst expectations, further solidifying its advantage. LMT's higher revenue growth is notable, but it comes at the cost of lower profitability margins. The current technical indicators suggest a neutral stance for both, but NOC's valuation metrics and profitability stand out as the key differentiators for a long-term investor seeking quality at a reasonable price.
Key Differentiator
NOC's superior profitability, evidenced by its higher net profit margin and return on equity, combined with a more attractive P/E valuation, makes it the clear winner. While LMT offers higher revenue growth, NOC demonstrates a greater ability to convert that revenue into shareholder value and operates more efficiently, presenting a stronger investment profile.
Joint Outlook
The outlook for NOC appears more favorable due to its strong profitability and valuation, suggesting resilience and potential for upside if market conditions improve. Its ability to consistently beat earnings estimates provides a solid foundation for future performance. LMT's outlook is tempered by its higher valuation and lower margins, although its strong revenue growth remains a positive factor. Investors should watch for signs of margin expansion or continued strong demand to support its current valuation. Both stocks are currently in a technical downtrend, indicating caution is warranted in the short term.
Price Analysis Comparison
Valuation Metrics
| Metric | NOC | LMT |
|---|---|---|
| P/E Ratio | 15.30 | 18.58 |
| Market Cap | 70.42B | 116.32B |
| Price/Sales | 1.59 | 1.51 |
| Price/Book | 3.82 | 13.22 |
| EV/EBITDA | 11.53 | 13.75 |
| Dividend Yield | 1.93% | 2.65% |
NOC trades at a P/E ratio of 15.30, significantly lower than LMT's 18.58, indicating a more attractive entry point for value-oriented investors. Despite LMT's higher market capitalization, NOC's valuation multiples suggest greater earnings power relative to its share price. Both stocks are trading below their 50-day and 200-day moving averages, indicating a bearish technical trend, but NOC's lower P/E makes it the more appealing option on a valuation basis. The price of NOC at $495.69 is below its 50-day and 200-day moving averages ($528.29 and $594.70), while LMT at $522.23 is also below its 50-day and 200-day moving averages ($544.63 and $564.08). NOC's price is closer to its 52-week low ($470.06) than LMT is to its ($437.25), suggesting more downside risk in NOC based on its recent trading range. However, the P/E difference is substantial enough to favor NOC from a valuation perspective.
Profitability & Efficiency
| Metric | NOC | LMT |
|---|---|---|
| Rev. Growth (Qtly) | 5.10% | 10.50% |
| Profit Margin | 10.48% | 8.16% |
| Return on Equity | 26.96% | 89.17% |
| Return on Assets | 7.15% | 8.64% |
| Debt/Equity | 0.95 | 2.34 |
NOC keeps more of each dollar of revenue as profit: a 10.48% net margin against LMT's 8.16%.
Earnings Reality Check
NOC
Last 3 Qs: NOC beat estimates 3x out of 3. Rose 2x after beats.
LMT
Last 2 Qs: LMT beat estimates 2x out of 2. Rose 2x after beats.
Technical Indicators
| Indicator | NOC | LMT |
|---|---|---|
| RSI (14) | 46.40 | 49.30 |
| 50-Day MA | $528.29 | $544.63 |
| 200-Day MA | $594.70 | $564.08 |
Both NOC and LMT are currently trading below their key moving averages, suggesting a bearish trend. NOC's 50-day EMA is at $495.88, just above its current price of $495.69, while its 200-day SMA is at $594.70. The Relative Strength Index (RSI) for NOC is 46.4, indicating neutral momentum, while LMT's RSI is 49.3 suggesting neutral momentum. LMT's Stochastic indicator at 73.97 is approaching overbought territory, whereas NOC's Stochastic at 58.54 is in neutral territory. The MACD for both tickers is negative, with NOC at -12.09 and LMT at -8.41, indicating bearish momentum, though LMT's MACD is less negative.
AI Analyst Sentiment
AI rating: CleaRank Financial AI's overall score for each asset, the same score shown on its own analysis page. It combines price trend and momentum with valuation, analyst and insider data where they exist.
NOC
AI Score: 55/100
LMT
AI Score: 51/100
Analyst sentiment leans towards a 'Buy' for both companies, but NOC garners a slightly more positive rating distribution. NOC has 3 'Strong Buy', 11 'Buy', 11 'Hold', and 1 'Strong Sell' rating from 26 analysts, with a median target price of $608.50. LMT has 2 'Strong Buy', 7 'Buy', 13 'Hold', and 0 'Strong Sell' ratings from 23 analysts, with a median target of $620.00. While LMT's median target price is higher, NOC's higher proportion of 'Strong Buy' and 'Buy' ratings suggests a more optimistic outlook from the analyst community relative to its current price. The price action in recent earnings reports also shows positive reactions for both, but NOC's larger earnings surprises may be contributing to a more positive underlying sentiment.
Risk Stratification
| Metric | NOC | LMT |
|---|---|---|
| Beta (Volatility) | N/A | 0.10 |
| Sharpe Ratio | 0.00 | -0.10 |
For NOC, a key risk is its current price trading below its 50-day and 200-day moving averages ($528.29 and $594.70), indicating potential for further downside if the broader market trend persists. Its proximity to its 52-week low also suggests it has experienced significant recent weakness. While its profitability is strong, a slowdown in its revenue growth could pressure its earnings. LMT's primary risk lies in its higher valuation multiples and lower profitability margins compared to NOC. Despite its stronger revenue growth, its less efficient operations could become a drag if market conditions tighten. Also, its higher RSI approaching overbought levels could signal a potential short-term pullback if momentum does not continue to build.
Comparative ProTips
- Prioritize NOC for its superior profitability and valuation, making it a more efficient investment.
- Monitor LMT's revenue growth against its profitability to assess if efficiency gains can be achieved.
- Consider the dividend yield difference; LMT offers a higher income stream, which may appeal to income-focused investors, but at the cost of lower profitability.
Monte Carlo Projection (10yr)
Simulated growth of $10,000 in each asset, from its own historical volatility and trend. Statistical outcomes, not forecasts.
Actionable Trade Plans
Compare entry, exit, and risk management levels for both assets
Select Your Trade Bias
Risk Tolerance
Conservative
3%
Aggressive
Portfolio Value
$
✎
Position Size: $200 - $300 per asset
NOC
Current: $495.69
ENTRY ZONES
Conservative
$470.91
Aggressive
$495.69
RISK MANAGEMENT
STOP LOSS
$456.78
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5% from current
$520.47
+10% from current
$545.26
+15% from current
$570.04
LMT
Current: $522.23
ENTRY ZONES
Conservative
$496.12
Aggressive
$522.23
RISK MANAGEMENT
STOP LOSS
$481.23
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5% from current
$548.34
+10% from current
$574.45
+15% from current
$600.56
Calculate Your Trade
Disclaimer
This comparison involves assets with varying risk profiles. The content is for educational purposes only. The verdict weighs trend, valuation and risk together. Past correlation does not guarantee future lockstep movement. Trading involves risk of loss. Note: The AI favored NOC based on profitability metrics. This is valid for the specified timeframe only.
Frequently Asked Questions
What are the key risks for NOC compared to LMT?+
NOC's main risks include its current price trading below key moving averages and its proximity to its 52-week low. LMT's risks are centered around its higher valuation and lower profitability margins, which could be a concern in a challenging economic environment.
What is the valuation difference between NOC and LMT?+
NOC trades at a lower P/E ratio of 15.30 compared to LMT's 18.58, making NOC the more attractively valued stock based on earnings.
What are the dividend yields for NOC and LMT?+
NOC offers a dividend yield of approximately 1.93%, while LMT provides a higher yield of about 2.65%.
How have NOC and LMT performed over the past year?+
Over the 12 months to October 15, 2026, NOC's price fell 18.6% and LMT's rose 4.1%. These are price changes; dividends are not included.
Which is more volatile, NOC or LMT?+
NOC has been more volatile. Over the 30 days to October 15, 2026, NOC's annualized volatility was 26.6% and LMT's 20.1%, measured from daily closing prices.
Do NOC and LMT move together?+
Yes, closely: over roughly the past year to October 15, 2026, the correlation of their daily returns was +0.71 (+1 means they move in lockstep, 0 means no relationship). Holding both adds little diversification.