NYSE:HII

Stock Analysis Report

Huntington Ingalls Industries

Executive Summary

Huntington Ingalls Industries, Inc. operates as a military shipbuilding company in the United States.

Rewards

PE ratio (18.6x) is below the Aerospace & Defense industry average (20.7x)

Risk Analysis

Earnings are forecast to decline by an average of -0.06% per year for the next 3 years

Has a high level of debt

Unstable dividend track record

Profit margins (6.2%) are lower than last year (10.2%)



Snowflake Analysis

Acceptable track record with mediocre balance sheet.


Similar Companies

United Technologies

NYSE:UTX

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

-8.2%

HII

-0.1%

US Aerospace & Defense

1.5%

US Market


1 Year Return

12.9%

HII

25.8%

US Aerospace & Defense

20.1%

US Market

Return vs Industry: HII underperformed the US Aerospace & Defense industry which returned 25.8% over the past year.

Return vs Market: HII underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

HIIIndustryMarket
7 Day-8.2%-0.1%1.5%
30 Day-11.4%1.6%1.4%
90 Day-3.2%6.1%8.7%
1 Year14.8%12.9%28.1%25.8%22.7%20.1%
3 Year20.6%15.8%54.6%46.4%50.1%40.5%
5 Year88.7%76.3%91.9%73.7%73.1%54.1%

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?

18.57x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: HII ($246.21) is trading above our estimate of fair value ($220.91)

Significantly Below Fair Value: HII is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: HII is good value based on its PE Ratio (18.6x) compared to the Aerospace & Defense industry average (20.7x).

PE vs Market: HII is poor value based on its PE Ratio (18.6x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: HII's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: HII is overvalued based on its PB Ratio (6.3x) compared to the US Aerospace & Defense industry average (2.8x).


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?

-0.06%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HII's earnings are forecast to decline over the next 3 years (-0.06% per year).

Earnings vs Market: HII's earnings are forecast to decline over the next 3 years (-0.06% per year).

High Growth Earnings: HII's earnings are forecast to decline over the next 3 years.

Revenue vs Market: HII's revenue (2.6% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: HII's revenue (2.6% 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 high in 3 years time (36.5%)


Next Steps

Past Performance

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

13.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HII has high quality earnings.

Growing Profit Margin: HII's current net profit margins (6.2%) are lower than last year (10.2%).


Past Earnings Growth Analysis

Earnings Trend: HII's earnings have grown by 13.9% 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 (-34.3%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (10.8%).


Return on Equity

High ROE: HII's Return on Equity (34.6%) 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 ($1.8B) do not cover its short term liabilities ($1.9B).

Long Term Liabilities: HII's short term assets ($1.8B) do not cover its long term liabilities ($3.6B).


Debt to Equity History and Analysis

Debt Level: HII's debt to equity ratio (81%) is considered high.

Reducing Debt: HII's debt to equity ratio has reduced from 122.4% to 81% over the past 5 years.

Debt Coverage: HII's debt is well covered by operating cash flow (69.7%).

Interest Coverage: HII's interest payments on its debt are well covered by EBIT (15.7x 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 1.4x debt).


Next Steps

Dividend

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

1.67%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Huntington Ingalls Industries before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.7%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: HII's dividend (1.67%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: HII's dividend (1.67%) is low compared to the top 25% of dividend payers in the US market (3.69%).


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 reasonably low payout ratio (27.2%), 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 (30.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure


CEO

Mike Petters (59yo)

8.9yrs

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 ($USD5.55M) is below average for companies of similar size in the US market ($USD10.78M).

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


Leadership Team

NamePositionTenureCompensationOwnership
C. Petters
President8.9yrsUS$5.55m1.74% $174.1m
Christopher Kastner
Executive VP & CFO3.9yrsUS$3.19m0.11% $11.4m
Kellye Walker
Executive VP & Chief Legal Officer5.1yrsUS$2.15m0.037% $3.7m
Jennifer Boykin
Executive VP & President of Newport News Shipbuilding2.6yrsUS$2.51m0.017% $1.7m
Brian Cuccias
Executive VP & President of Ingalls Shipbuilding5.8yrsUS$2.76m0.14% $13.6m
Matthew Needy
Vice President of Operations2.3yrsno datano data
Nicolas Schuck
Corporate VP4.5yrsno data0.0055% $552.0k
Bharat Amin
Executive VP & Chief Information Officer0.08yrsno data0.011% $1.1m
Susan Jacobs
Vice President of Human Resources and Administration0yrsno datano data
Dwayne Blake
Corporate Vice President of Investor Relations7.1yrsno datano data

4.5yrs

Average Tenure

55yo

Average Age

Experienced Management: HII's management team is considered experienced (4.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
C. Petters
President8.9yrsUS$5.55m1.74% $174.1m
Philip Bilden
Independent Director2.3yrsUS$244.63k0.027% $2.7m
Anastasia Kelly
Independent Director8.9yrsUS$257.13k0.0041% $408.4k
John Welch
Independent Non-Executive Director5yrsUS$254.63k0.0038% $380.3k
Thomas Schievelbein
Independent Director8.9yrsUS$267.13k0.0027% $271.0k
Stephen Wilson
Independent Director4.3yrsUS$254.63k0.0023% $226.8k
Victoria Harker
Independent Director7.5yrsUS$257.13k0.0041% $408.4k
Thomas Fargo
Independent Chairman of the Board8.9yrsUS$479.63k0.0040% $400.4k
Augustus Collins
Independent Director3.3yrsUS$254.63kno data
Kirkland Donald
Independent Director3.1yrsUS$244.63kno data

6.3yrs

Average Tenure

65yo

Average Age

Experienced Board: HII's board of directors are considered experienced (6.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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: 2010
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$10.036b
  • Shares outstanding: 40.76m
  • 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
H1II34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

Huntington Ingalls Industries, Inc. operates as a military shipbuilding company 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 IT and mission-based solutions; 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. The company was incorporated in 2010 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 Analysis2020/02/18 00:36
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.