What happened
LVM Capital Management increased its holding in Northrop Grumman (NOC 0.15%) by 6,237 shares during Q2 2025, bringing its total stake to 39,485 shares valued at $19.74 million. The purchase, disclosed in a Securities and Exchange Commission (SEC filing) for the period ending Q2 2025, totaled $3.16 million and adjusted the fund’s NOC allocation to 2.05% of its reportable assets.
What else do you need to know?
Top five holdings after the filing:
- Microsoft (MSFT): $87 million (9% of AUM)
- Apple (AAPL): $79.4 million (8.2% of AUM)
- Broadcom (AVGO): $73.9 million (7.7% of AUM)
- Eli Lilly (LLY): $39.6 million (4.1% of AUM)
- AbbVie (ABBV): $31.1 million (3.2% of AUM)
Other need-to-know facts about NOC:
- Northrop Grumman shares closed at $504.20 on July 7, 2025, up 15.3% over the past year.
- Northrop Grumman stock is outperforming the S&P 500 by 3.4 percentage points over the past year.
- Dividend yield is 1.84%; forward price/earnings ratio: 19.9; enterprise value/EBITDA ratio (TTM) is 13.2.
- NOC stock trades 7% below its 52-week high as of July 8, 2025.
Company overview
| Metric | Value |
|---|---|
| Market capitalization | $72.6 billion |
| Revenue (TTM) | $40.37 billion |
| Net income (TTM) | $3.71 billion |
Note: TTM figures are as of March 31, 2025.
Company snapshot
- Offers advanced aerospace and defense products, including aircraft systems, unmanned autonomous systems, weapons, sensors, cyber solutions, and space systems.
- Operates through four main segments: Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems, providing integrated solutions for national security and space exploration.
- Serves government agencies worldwide, with the U.S. Department of Defense and allied defense organizations as principal customers.
Northrop Grumman is a leading global defense contractor with a diversified portfolio spanning aeronautics, mission systems, defense, and space. The company leverages advanced engineering and integration capabilities to deliver mission-critical solutions for national security and space exploration.
Foolish take
Northrop Grumman’s sales and profits tumbled in the first quarter, largely because driven by its space business, which took a hit because of a “wind-down of work” on some space programs. Shares of the defense company plummeted after its Q1 numbers came out, but investors and institutions saw the dip as an opportunity to buy, and rightfully so.
Although higher potential costs on its crucial B-21 bomber program hit Northrop Grumman’s profits in Q1, the company is already working on improvements to de-risk the program even as its other segments grow. So, despite a weak Q1, Northrop Grumman reiterated its sales and free cash flow (FCF) guidance of $42 billion-$42.5 billion and free cash flow guidance of $2.85 billion to $3.25 billion for the full year. That would mean roughly 2% and 10% growth, respectively, at the lower end of the company’s guidance range.
Meanwhile, Northrop Grumman’s backlog continues to grow, backed by rising global defense budgets. The defense giant bagged net awards worth $10.8 billion in Q1, and its backlog hit a record $92.8 billion. Northrop Grumman expects its annual FCF to cross $3.3 billion by 2027, a substantial part of which should be returned to shareholders in the form of dividends.
Glossary
- 13F reportable assets: Securities that institutional investment managers must disclose quarterly to the SEC on Form 13F.
- Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
- SEC filing: Official documents submitted to the U.S. Securities and Exchange Commission, often disclosing financial or ownership information.
- Allocation: The percentage of a portfolio or fund invested in a specific asset, sector, or security.
- Dividend yield: Annual dividends paid by a company as a percentage of its current share price.
- Enterprise value/EBITDA ratio: A valuation metric comparing a company's total value to its earnings before interest, taxes, depreciation, and amortization.
- Q2 2025: The second quarter of the 2025 fiscal year, typically covering April through June.
- Outperforming the S&P 500: Achieving a higher investment return than the S&P 500 index over a given period.
- Post-trade position: The total number of shares or value held in a security after a transaction is completed.
- Top holdings: The largest investments in a fund or portfolio, usually by market value or percentage.
- Unmanned autonomous systems: Machines or vehicles that operate without human control, often used in defense and aerospace.
- Mission-critical solutions: Products or services essential to the core operations or security objectives of an organization or government.