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Huntington Ingalls Industries Inc HII

Morningstar Rating
$248.91 +1.55 (0.63%)
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Company Report

Huntington Ingalls: Shares of Long-Cycle Boat Builder Are Undervalued Despite Short-Term Choppiness

Wide-moat Huntington Ingalls’ shares are trading 20% below our $317 fair value estimate. While shipbuilding doesn't offer the juiciest margins in the defense industry, it represents the quintessential set of conditions we see as providing durable competitive advantage and decades of visibility into revenue and profitability. The firm's quarterly revenue and profits can be lumpy, but we believe long-term investors will be rewarded in the wake of growing submarine and destroyer revenue.

Price vs Fair Value

HII is trading at a 98% premium.
Price
$248.91
Fair Value
$627.00
Uncertainty
Low
1-Star Price
$893.43
5-Star Price
$559.30
Economic Moat
Qkmk
Capital Allocation
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Bulls Say, Bears Say

Bulls

The National Defense Strategy prioritizes modernizing the military to counter potential great power adversaries. We think this will increase the proportion of the defense budget available to contractors.

Bears

Competing claims on future U.S. budget spending may depress future defense spending.

Is it the right time to buy, sell, or hold?
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News

Trading Information

Previous Close Price
$247.36
Day Range
$244.20249.67
52-Week Range
$199.11299.50
Bid/Ask
$232.04 / $256.99
Market Cap
$9.82 Bil
Volume/Avg
877,730 / 330,837

Key Statistics

Price/Earnings (Normalized)
14.40
Price/Sales
0.86
Dividend Yield (Trailing)
2.07%
Dividend Yield (Forward)
2.09%
Total Yield
3.37%

Company Profile

Huntington Ingalls Industries is the largest independent military shipbuilder in the U.S., spun off of Northrop Grumman in 2011. It operates three segments, two of which are storied shipyards: Ingalls produces non-nuclear-powered ships including amphibious landing ships and Arleigh Burke-class destroyers while Newport News produces nuclear-powered ships as the only producer of Gerald Ford-class aircraft carriers and a major subcontractor on Virginia and Columbia-class nuclear submarines. Huntington Ingalls shares production of destroyers and nuclear submarines with General Dynamics' Bath Iron Works and Electric Boat shipyards, respectively. The company’s Mission Technologies segment produces uncrewed sea vessels and provides a range of IT and other services to U.S. government agencies.
Sector
Industrials
Industry
Aerospace & Defense
Stock Style Box
Mid Core
Total Number of Employees
44,000

Competitors

Valuation

Metric
HII
NOC
GD
Price/Earnings (Normalized)
14.4019.5024.33
Price/Book Value
2.384.503.82
Price/Sales
0.861.631.91
Price/Cash Flow
10.0615.5420.59
Price/Earnings
HII
NOC
GD

Financial Strength

Metric
HII
NOC
GD
Quick Ratio
0.860.860.76
Current Ratio
0.961.131.44
Interest Coverage
10.505.4113.19
Quick Ratio
HII
NOC
GD

Profitability

Metric
HII
NOC
GD
Return on Assets (Normalized)
6.54%4.88%6.58%
Return on Equity (Normalized)
18.67%14.79%17.44%
Return on Invested Capital (Normalized)
11.82%8.76%12.06%
Return on Assets
HII
NOC
GD
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