The recent dip in Northrop's stock may create a good buying opportunity from a long-term investing perspective.
Northrop's backlog increase provides a catalyst for revenue growth.
Multiple-year double-digit earnings growth can help drive the stock for above-average gains.
Most of the defense-related companies have a positive future outlook. This is a result of the steady expected annual growth of about 3% through 2023 for U.S. defense spending. The company that I'm focusing on in this article is the global security firm Northrop Grumman (NOC).
Northrop looks like a solid investment due to its backlog growth of 21% in 2019 over the prior year. Bookings increased at a strong pace at 66% over the same time period. Northrop tends to be awarded lucrative contracts on an ongoing basis, which drives this growth, leading to revenue and earnings increases.
The article is for informational purposes only (not a solicitation to buy or sell stocks). David is not a registered investment adviser. Kirk Spano is an RIA. Investors should do their own research or consult a financial adviser to determine what investments are appropriate for their individual situation. This article expresses my opinions and I cannot guarantee that the information/results will be accurate. Investing in stocks involves risk and could result in losses.
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