NYSE:HII

Stock Analysis Report

Huntington Ingalls Industries

Executive Summary

Huntington Ingalls Industries, Inc. engages in the designing, building, overhauling, and repairing military ships in the United States.

Rewards

Trading at 26.5% below its fair value

Earnings are forecast to grow 3.68% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Good value with adequate balance sheet.


Similar Companies

Share Price & News

How has Huntington Ingalls Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HII has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.6%

HII

1.7%

US Aerospace & Defense

0.8%

US Market


1 Year Return

41.7%

HII

38.8%

US Aerospace & Defense

25.1%

US Market

Return vs Industry: HII exceeded the US Aerospace & Defense industry which returned 36.3% over the past year.

Return vs Market: HII exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

HIIIndustryMarket
7 Day1.6%1.7%0.8%
30 Day9.0%6.1%3.1%
90 Day26.2%10.2%10.9%
1 Year44.0%41.7%41.4%38.8%27.7%25.1%
3 Year50.6%44.5%59.6%51.1%51.3%41.6%
5 Year151.8%135.2%101.8%82.6%77.2%57.6%

Price Volatility Vs. Market

How volatile is Huntington Ingalls Industries's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Huntington Ingalls Industries undervalued compared to its fair value and its price relative to the market?

24.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HII ($271.39) is trading below our estimate of fair value ($369.41)

Significantly Below Fair Value: HII is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HII is good value based on its PE Ratio (18.5x) compared to the Aerospace & Defense industry average (20.7x).

PE vs Market: HII is good value based on its PE Ratio (18.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: HII is poor value based on its PEG Ratio (5x)


Price to Book Ratio

PB vs Industry: HII is overvalued based on its PB Ratio (6.5x) compared to the US Aerospace & Defense industry average (2.7x).


Next Steps

Future Growth

How is Huntington Ingalls Industries forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

3.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HII's forecast earnings growth (3.7% per year) is above the savings rate (1.7%).

Earnings vs Market: HII's earnings (3.7% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: HII's earnings are forecast to grow, but not significantly.

Revenue vs Market: HII's revenue (2.9% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: HII's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HII's Return on Equity is forecast to be very high in 3 years time (40%).


Next Steps

Past Performance

How has Huntington Ingalls Industries performed over the past 5 years?

15.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HII has high quality earnings.

Growing Profit Margin: HII's current net profit margins (7%) are lower than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: HII's earnings have grown by 15.5% per year over the past 5 years.

Accelerating Growth: HII's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HII had negative earnings growth (-11%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (13.9%).


Return on Equity

High ROE: HII's Return on Equity (35.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Huntington Ingalls Industries's financial position?


Financial Position Analysis

Short Term Liabilities: HII's short term assets ($2.0B) exceed its short term liabilities ($2.0B).

Long Term Liabilities: HII's short term assets ($2.0B) do not cover its long term liabilities ($3.5B).


Debt to Equity History and Analysis

Debt Level: HII's debt to equity ratio (90.9%) is considered high.

Reducing Debt: HII's debt to equity ratio has reduced from 105% to 90.9% over the past 5 years.

Debt Coverage: HII's debt is well covered by operating cash flow (63.1%).

Interest Coverage: HII's interest payments on its debt are well covered by EBIT (16.7x coverage).


Balance Sheet

Inventory Level: HII has a high level of physical assets or inventory.

Debt Coverage by Assets: HII's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

What is Huntington Ingalls Industries's current dividend yield, its reliability and sustainability?

1.48%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years1.5%

Current dividend yield vs market & industry

Notable Dividend: HII's dividend (1.52%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: HII's dividend (1.52%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, HII has been paying a dividend for less than 10 years.

Growing Dividend: HII's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.5%), HII's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HII's dividends in 3 years are forecast to be well covered by earnings (26.4% payout ratio).


Next Steps

Management

What is the CEO of Huntington Ingalls Industries's salary, the management and board of directors tenure and is there insider trading?

4.7yrs

Average management tenure


CEO

Mike Petters (59yo)

8.8yrs

Tenure

US$5,551,979

Compensation

Mr. C. Michael Petters, also known as Mike, has been the Chief Executive Officer of Huntington Ingalls Industries, Inc. since March 31, 2011 and has been its President since November 1, 2004. Mr. Petters s ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD5.55M) is below average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.7yrs

Average Tenure

55yo

Average Age

Experienced Management: HII's management team is considered experienced (4.7 years average tenure).


Board Age and Tenure

6.2yrs

Average Tenure

65yo

Average Age

Experienced Board: HII's board of directors are considered experienced (6.2 years average tenure).


Insider Trading

Insider Buying: HII insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$137,98613 Nov 19
Dale Wyatt
EntityIndividual
Shares550
Max PriceUS$250.88
SellUS$100,00013 Nov 19
Nicolas Schuck
EntityIndividual
Role
Chief Accounting Officer
Corporate VP
Shares400
Max PriceUS$250.00
SellUS$275,17003 Jun 19
Jennifer Boykin
EntityIndividual
Role
Senior Key Executive
Executive Vice President
Shares1,345
Max PriceUS$204.59
SellUS$102,23131 May 19
Nicolas Schuck
EntityIndividual
Role
Chief Accounting Officer
Corporate VP
Shares500
Max PriceUS$204.46
SellUS$394,12022 May 19
William Ermatinger
EntityIndividual
Shares1,863
Max PriceUS$211.55
SellUS$102,83015 May 19
Andy Green
EntityIndividual
Shares500
Max PriceUS$205.66
SellUS$528,49711 Mar 19
Jennifer Boykin
EntityIndividual
Role
Senior Key Executive
Executive Vice President
Shares2,647
Max PriceUS$199.66
SellUS$327,26708 Mar 19
Mitchell Waldman
EntityIndividual
Shares1,581
Max PriceUS$207.00
SellUS$1,244,55106 Mar 19
D. Stabler
EntityIndividual
Shares6,020
Max PriceUS$206.74
SellUS$809,21506 Mar 19
Christopher Kastner
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares3,919
Max PriceUS$206.49
SellUS$242,79322 Feb 19
Dale Wyatt
EntityIndividual
Shares1,100
Max PriceUS$220.72
SellUS$154,40022 Feb 19
Thomas Fargo
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares700
Max PriceUS$220.57

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Mike Petters (59yo)

    President

    • Tenure: 8.8yrs
    • Compensation: US$5.55m
  • Kellye Walker (52yo)

    Executive VP & Chief Legal Officer

    • Tenure: 5yrs
    • Compensation: US$2.15m
  • Jennifer Boykin (55yo)

    Executive Vice President

    • Tenure: 2.5yrs
    • Compensation: US$2.51m
  • Matt Needy

    Vice President of Operations

    • Tenure: 2.3yrs
  • Chris Kastner (55yo)

    Executive VP & CFO

    • Tenure: 3.8yrs
    • Compensation: US$3.19m
  • Dwayne Blake

    Corporate Vice President of Investor Relations

    • Tenure: 7yrs
  • Brian Cuccias (62yo)

    Executive VP & President of Ingalls Shipbuilding

    • Tenure: 5.8yrs
    • Compensation: US$2.76m
  • Bharat Amin

    Executive VP & Chief Information Officer

    • Nicolas Schuck (45yo)

      Corporate VP

      • Tenure: 4.4yrs
    • Susan Jacobs

      Vice President of Human Resources and Administration


      Board Members

      • Philip Bilden (54yo)

        Independent Director

        • Tenure: 2.2yrs
        • Compensation: US$244.63k
      • Stasia Kelly (70yo)

        Independent Director

        • Tenure: 8.8yrs
        • Compensation: US$257.13k
      • John Welch (69yo)

        Independent Non-Executive Director

        • Tenure: 4.9yrs
        • Compensation: US$254.63k
      • Mike Petters (59yo)

        President

        • Tenure: 8.8yrs
        • Compensation: US$5.55m
      • Thomas Schievelbein (65yo)

        Independent Director

        • Tenure: 8.8yrs
        • Compensation: US$267.13k
      • Stephen Wilson (71yo)

        Independent Director

        • Tenure: 4.3yrs
        • Compensation: US$254.63k
      • Victoria Harker (54yo)

        Independent Director

        • Tenure: 7.4yrs
        • Compensation: US$257.13k
      • Tom Fargo (70yo)

        Independent Chairman of the Board

        • Tenure: 8.8yrs
        • Compensation: US$479.63k
      • Augustus Collins (61yo)

        Independent Director

        • Tenure: 3.2yrs
        • Compensation: US$254.63k
      • Kirk Donald (65yo)

        Independent Director

        • Tenure: 3yrs
        • Compensation: US$244.63k

      Company Information

      Huntington Ingalls Industries, Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Huntington Ingalls Industries, Inc.
      • Ticker: HII
      • Exchange: NYSE
      • Founded: 1886
      • Industry: Aerospace and Defense
      • Sector: Capital Goods
      • Market Cap: US$11.394b
      • Shares outstanding: 40.90m
      • Website: https://www.huntingtoningalls.com

      Number of Employees


      Location

      • Huntington Ingalls Industries, Inc.
      • 4101 Washington Avenue
      • Newport News
      • Virginia
      • 23607
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      HIINYSE (New York Stock Exchange)YesNew Common StockUSUSDMar 2011
      HI4DB (Deutsche Boerse AG)YesNew Common StockDEEURMar 2011
      0J76LSE (London Stock Exchange)YesNew Common StockGBUSDMar 2011

      Biography

      Huntington Ingalls Industries, Inc. engages in the designing, building, overhauling, and repairing military ships in the United States. It operates through three segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Technical Solutions. The company is involved in the design and construction of non-nuclear ships comprising amphibious assault ships that include deck amphibious ships and transport dock ships; surface combatants; and national security cutters for the U.S. Navy and U.S. Coast Guard. It also provides nuclear-powered ships, such as aircraft carriers and submarines, as well as refueling and overhaul, and inactivation services. In addition, the company offers naval nuclear support services, including fleet services comprising design, construction, maintenance, and disposal activities for in service U.S. Navy nuclear ships; and maintenance services on nuclear reactor prototypes. Further, it provides fleet support services comprising ship technical and waterfront; naval architecture and marine engineering; integrated logistics support; technical documentation development; warehousing, asset management, and material readiness; operational and maintenance training development and delivery; software design and development; IT infrastructure support, and data delivery and management; and cyber security and information assurance services, as well as undersea vehicle and specialized craft development and prototyping services. Additionally, the company offers integrated missions solutions services; nuclear and environmental services; engineering, procurement, and construction management services to the oil and gas industry; and nuclear management and operations, and environmental management services to the Department of Energy, Department of Defense, local governments, and the private sector. It operates mobile dental clinic that offers dental care, including exams and X-rays. The company was founded in 1886 and is headquartered in Newport News, Virginia. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/22 01:03
      End of Day Share Price2020/01/21 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.