Northrop Grumman Corporation (NOC): A Bull Case Theory 

We came across a bullish thesis on Northrop Grumman Corporation on Quality Value Investing’s Substack by David J. Waldron. In this article, we will summarize the bulls’ thesis on NOC. Northrop Grumman Corporation’s share was trading at $553.00 as of December 4th. NOC’s trailing and forward P/E were 19.93 and 18.94 respectively according to Yahoo Finance.

Northrop Grumman Corporation (NYSE: NOC) is a leading aerospace and defense technology company with a global footprint, operating across the U.S., Asia/Pacific, and Europe. The company’s diversified segments—Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems—provide strategic and tactical aircraft, missile defense, intelligence, surveillance, reconnaissance solutions, and satellites.

Founded in 1939 and headquartered in Falls Church, Virginia, NOC benefits from a wide economic moat, with intangible assets and established relationships in the defense industry creating substantial barriers to entry and steady demand from the military-industrial complex. Northrop Grumman has delivered low to mid single-digit annualized revenue growth over the trailing five years, underperforming broader market averages, but maintains nearly double-digit net profit margins, reflecting operational efficiency. Its return on equity and return on invested capital meet internal targets, aided by an active capital allocation strategy, including share repurchases totaling $4.2 billion and accelerated share repurchases in 2024, alongside consistent dividend payouts.

While trailing five-year free cash flow growth has lagged, recent EPS growth surged over 70%, highlighting management’s ability to drive shareholder value. NOC’s long-term integration into U.S. defense operations provides incremental growth opportunities and stable margins, with management demonstrating disciplined capital deployment and a shareholder-friendly approach.

Despite modest revenue expansion, the combination of strong profitability, effective capital returns, wide moat advantages, and resilient demand supports a bullish investment view. Northrop Grumman represents a core industrial aerospace and defense holding, offering both stability through dividends and potential upside from operational efficiency and strategic growth initiatives, making it an attractive opportunity for long-term investors seeking exposure to the defense sector.

Previously we covered a bullish thesis on Northrop Grumman Corporation (NOC) by Daan Rijnberk in March 2025, which highlighted the company’s leadership in defense and aerospace, strong backlog, expanding margins, and disciplined capital returns. The company’s stock price has appreciated approximately by 8.61% since our coverage. The thesis still stands as NOC benefits from a wide economic moat. David J. Waldron shares a similar bullish view but emphasizes historical revenue and EPS growth.

Northrop Grumman Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held NOC at the end of the second quarter which was 54 in the previous quarter. While we acknowledge the risk and potential of NOC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NOC and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.