L3Harris vs Northrop Grumman

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KIRA’s take AI analyst

I put L3Harris and Northrop Grumman side by side, using each one’s latest annual report. Here is what stands out:

Northrop Grumman is the larger business, with $42.0B of revenue in fiscal 2025 against $21.9B for L3Harris, about 1.9 times as much.
Northrop Grumman kept more of each dollar of sales as operating profit (10.8% operating margin, against 9.7%).
L3Harris turned more of its sales into free cash flow (12.3% FCF margin, against 7.9%).
Northrop Grumman earned a higher return on the capital invested in it (13.5%, against 5.8%).
Investors pay more for each dollar of L3Harris’s earnings: a P/E of 26.2x against 17.9x for Northrop Grumman.

Who comes out ahead

Of the 10 measures where higher (or lower) is clearly better, how many each company leads.

L3Harris

LHX

4/10

Revenue growth5-year growthFCF marginPiotroski F-score

Northrop Grumman

NOC

6/10

Operating marginNet marginReturn on capitalReturn on equityNet debt / EBITDAShare count change

Side by side

Best in the row

Latest fiscal year	LHX FY25	NOC FY25
Size
Market cap	$48.7B	$80.5B
Revenue	$21.9B	$42.0B
Free cash flow	$2.7B	$3.3B
Net income	$1.6B	$4.2B
Growth
Revenue growth	2.5%	2.2%
5-year growth	3.7%	2.7%
Share count change	−1.2%	−2.4%
Profitability
Gross margin	25.7%	—
Operating margin	9.7%	10.8%
Net margin	7.4%	10.0%
FCF margin	12.3%	7.9%
Return on capital	5.8%	13.5%
Return on equity	8.2%	26.2%
Balance sheet
Net debt	$10.0B	$11.3B
Net debt / EBITDA	3.0x	1.9x
Dividends and buybacks	$2.1B	$2.9B
Valuation & quality
P/E	26.2x	17.9x
Piotroski F-score	8	6

Ten years

Revenue

FY16

LHX $6.0B

NOC $24.7B

FY17

LHX $5.9B

NOC $26.0B

FY18

LHX $6.2B

NOC $30.1B

FY19

LHX $6.8B

NOC $33.8B

FY20

LHX $18.2B

NOC $36.8B

FY21

LHX $17.8B

NOC $35.7B

FY22

LHX $17.1B

NOC $36.6B

FY23

LHX $19.4B

NOC $39.3B

FY24

LHX $21.3B

NOC $41.0B

FY25

LHX $21.9B

NOC $42.0B

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

LHX NOC

Operating margin

FY16

LHX 17.6%

NOC 13.3%

FY17

LHX 18.2%

NOC 12.4%

FY18

LHX 18.2%

NOC 12.6%

FY19

LHX 21.3%

NOC 11.7%

FY20

LHX 11.9%

NOC 11.1%

FY21

LHX 11.8%

NOC 15.8%

FY22

LHX 6.6%

NOC 9.8%

FY23

LHX 7.3%

NOC 6.5%

FY24

LHX 9.0%

NOC 10.7%

FY25

LHX 9.7%

NOC 10.8%

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

LHX NOC

Free cash flow

FY16

LHX $772M

NOC $1.9B

FY17

LHX $450M

NOC $1.7B

FY18

LHX $615M

NOC $2.6B

FY19

LHX $1.0B

NOC $3.0B

FY20

LHX $2.4B

NOC $2.9B

FY21

LHX $2.3B

NOC $2.2B

FY22

LHX $1.9B

NOC $1.5B

FY23

LHX $1.6B

NOC $2.1B

FY24

LHX $2.2B

NOC $2.6B

FY25

LHX $2.7B

NOC $3.3B

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

LHX NOC

Return on capital

FY16

LHX 9.8%

NOC 25.5%

FY17

LHX 11.5%

NOC 20.7%

FY18

LHX 13.1%

NOC 20.3%

FY19

LHX 18.9%

NOC 16.9%

FY20

LHX 10.8%

NOC 16.9%

FY21

LHX 6.6%

NOC 20.7%

FY22

LHX 3.7%

NOC 12.6%

FY23

LHX 5.0%

NOC 8.7%

FY24

LHX 5.8%

NOC 13.8%

FY25

LHX 5.8%

NOC 13.5%

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

LHX NOC

Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.