Diversifying your investment portfolio into the aerospace and defense industry? You could consider Northrop Grumman (NOC -0.48%), an experienced leader in this sector. Known for its pioneering work in defense and aerospace technologies, with a hand in the American space program and many other government contracts, Northrop Grumman has been a mainstay in investment circles for decades.
NYSE: NOC
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As the industry faces new challenges and opportunities, from cybersecurity to expanded space exploration, Northrop Grumman's evolving strategy positions it as a resilient and forward-thinking choice for investors.
The basics of Northrop Grumman
Northrop Grumman Corporation, a titan in the defense and aerospace sectors, is best known for its sophisticated military hardware and space technology. Since its inception in 1939, Northrop Grumman has also become a technology giant, venturing into realms like cybersecurity, unmanned aerial vehicles, and space systems.
Despite intense competition and the complexities of a dynamic market, Northrop Grumman continues to innovate and maintain a significant presence in the global defense and aerospace sectors. This makes Northrop Grumman a compelling choice for investors interested in the defense and space exploration sectors.
How to buy Northrop Grumman stock
- Open your brokerage account: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Should I invest in Northrop Grumman?
Before you decide to invest in Northrop Grumman, let's assess its investment merits.
Is Northrop Grumman profitable?
Northrop Grumman's financial track record is a blend of stability and strategic growth. In fiscal year 2024, the company reported robust revenues of $41 billion, with net income of $4.2 billion. Its organic sales rose 4% year over year.
The defense industry's profitability is often tied to long-term contracts and the cyclical nature of government spending. Northrop Grumman's operational cash flow stood at $4.4 billion in 2024, indicating solid operational efficiency. The company's significant investments in research and development (R&D) and technological advancements are essential for staying at the forefront of the defense and aerospace sectors.
Does Northrop Grumman pay a dividend?
Yes, Northrop Grumman makes quarterly dividend payments. The company has a history of increasing its dividends, reflecting its financial health and commitment to shareholder value.
The dividend yield has been competitive, ranging between 1.2% and 2% in the long run. Northrop Grumman's balance of dividend payouts and reinvestment into growth initiatives offers a compelling mix for investors seeking both income and capital growth potential.
ETFs with exposure to Northrop Grumman
Northrop Grumman is a longstanding component of many market indexes, such as the S&P 500 (SNPINDEX:^GSPC) and the Russell 1000. As such, many exchange-traded funds and mutual funds that track these indexes will automatically own a significant amount of Northrop Grumman stock.
Here are a few ETFs with prominent ownership of Northrup Grumman in October 2025, measured by dollar amounts or the proportion of the fund's assets being invested in this specific ticker.
EXCHANGE-TRADED FUND | NUMBER OF NORTHROP GRUMMAN SHARES UNDER MANAGEMENT | ETF'S NET ASSET VALUE | % ALLOCATION OF NORTHROP GRUMMAN STOCK |
|---|---|---|---|
SPDR S&P 500 ETF TRUST (NYSEMKT:SPY) | 1.59 million | $672.7 billion | 0.15% |
iShares Core S&P 500 ETF (NYSEMKT:IVV) | 1.64 million | $701.4 billion | 0.14% |
iShares US Aerospace and Defense ETF (NYSEMKT:ITA) | 875,910 | $11.8 billion | 4.5% |
Invesco Aerospace & Defense ETF (NYSEMKT:PPA) | 592,640 | $6.7 billion | 5.37% |
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The bottom line on Northrop Grumman
Northrop Grumman's investment potential is shaped by its prominent position in the defense and aerospace sectors, its innovative edge, and its financial resilience. Despite facing stiff competition from robust industry peers like Lockheed Martin and Raytheon, Northrop Grumman's consistent involvement in key defense contracts and advancements in areas such as space exploration and cybersecurity make it a potentially strong long-term investment.
While the volatility and sharply competitive nature of the defense sector might deter some investors, others may see Northrop Grumman's adaptability and consistent performance as a testament to its enduring strength.
Northrop Grumman may not fit every portfolio, but for those looking for long-term growth in a competitive yet lucrative defense and aerospace market, Northrop Grumman stands out as a compelling option. At the very least, any investor in the defense sector needs to keep an eye on this sector giant.
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