Buy Northrop Grumman to Hedge Against Volatility (NOC)

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The global stock markets have arrested the attention of the world recently, while other issues have fallen from the front page. And somewhere in these global issues, Northrop Grumman (NOC) is involved. Because if the U.S. is monitoring global events or actively engaged in determining those events, NOC is there.

Buy Northrop Grumman to Hedge Against a Volatile Market (NOC)This is a company with an extensive history in defense: In the 1940s, Northrop built its first flying wing aircraft, and in 1979, unleashed one of the first modern fighter jets, the F/A 18 Hornet, followed by the B2 bomber in 1989.

And since the 1990s, NOC has continued to make its mark on the technology side of the defense business, much of it through acquisition.

In 1994, Northrop acquired Grumman Corporation … followed by Westinghouse Electronics, Teledyne (TDY), Litton, Newport News Shipbuilding and TRW Inc., along with about a dozen others.

Global Turmoil? Not a Problem for NOC

Today, Northrop Grumman is one of the major players the global defense sector with a special focus on one of the fastest growing sectors — C4ISR, or command, control, communications, computing, intelligence, surveillance and reconnaissance.

NOC doesn’t build battleships and fighter jets, so much as it provides the technology and resources to have them built. The upside to this approach is it wins when almost any major defense program is funded, since it’s likely that whatever it is, NOC will be getting some of the contract work.

The entire sector was hit hard after the global financial crisis, since government spending around the globe was slashed and defense spending was hit particularly hard.

But as the world reemerges from those dark days, there’s an increasing amount of concern as destabilizing forces creep up once again:

There is the conflict in Syria, and ISIS spreading throughout the Middle East and even the Far East, while Russia continues its aggression in Ukraine. North Korea, as always, remains a wild card. Afghanistan is on the brink of civil war, Nigeria is restive and Boko Harem is terrorizing west Africa.

And those are just the highlights.

The point is, the U.S. is no longer recovering from the immense cost of the Iraq and Afghanistan conflicts. It has retooled and refocused on how to address the global threats of the twenty-first century using available new technologies.

And NOC is perfectly situated to benefit from this new thinking. In fact, it’s already benefiting.

Many of the big defense stocks have been on the upswing since late last year, and NOC is certainly one of them, up around 13% in that span.

Its Q2 numbers were also encouraging: NOC handily beat earnings and raised its guidance for the full year.

Two catalysts driving NOC’s momentum are the talk of the upgrading the B2 and the rise in drones.

Both of these are very much NOC’s stomping grounds. Winning the new B2 contract is a $60 billion deal. As for drones, NOC is already a major supplier of unmanned vehicles to all the branches of the military, and drones are key to modern warfare, especially C4ISR work.

But beyond this rock-solid long-term growth, NOC also has a nice 2% dividend yield. It recently hiked its dividend 14%, to continue it 12-year run at increasing its dividend.

When the markets get volatile, it’s the firms like Northrop Grumman that will reassure your faith in your portfolio. And right now, NOC is bargain, with plenty of upside in an  increasingly volatile world.

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip GrowthEmerging GrowthUltimate GrowthFamily Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/09/drones-northrop-grumman-noc-c4isr/.

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