General Dynamics vs Northrop Grumman Which Outperforms?

General Dynamics and Northrop Grumman are two prominent defense contractors in the United States. Both companies are major players in the defense industry, providing a wide range of products and services to the military and other government agencies. Investors often compare and contrast the stocks of these two companies, considering factors such as their financial performance, contract wins, and overall market trends. Understanding the differences between General Dynamics and Northrop Grumman stocks can help investors make informed decisions about their portfolios.

General Dynamics or Northrop Grumman?

When comparing General Dynamics and Northrop Grumman, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between General Dynamics and Northrop Grumman.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. General Dynamics has a dividend yield of 2.23%, while Northrop Grumman has a dividend yield of 1.47%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. General Dynamics reports a 5-year dividend growth of 7.54% year and a payout ratio of 41.22%. On the other hand, Northrop Grumman reports a 5-year dividend growth of 9.33% year and a payout ratio of 49.22%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with General Dynamics P/E ratio at 23.67 and Northrop Grumman's P/E ratio at 32.85. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. General Dynamics P/B ratio is 3.75 while Northrop Grumman's P/B ratio is 5.29.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, General Dynamics has seen a 5-year revenue growth of 0.26%, while Northrop Grumman's is 0.50%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with General Dynamics's ROE at 16.59% and Northrop Grumman's ROE at 16.36%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $311.29 for General Dynamics and $532.93 for Northrop Grumman. Over the past year, General Dynamics's prices ranged from $243.53 to $315.93, with a yearly change of 29.73%. Northrop Grumman's prices fluctuated between $418.60 and $555.57, with a yearly change of 32.72%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.