Huntington Ingalls Industries, Inc. (NYSE: HII)

Sector: Industrials Industry: Aerospace & Defense CIK: 0001501585
Market Cap 15.64 Bn
P/B 3.08
P/E 25.85
P/S 1.25
ROIC (Qtr) 6.63
Div Yield % 1.37
Rev 1y % (Qtr) 15.71
Total Debt (Qtr) 2.92 Bn
Debt/Equity (Qtr) 0.58

About

Huntington Ingalls Industries, Inc. (HII), a prominent player in the defense industry, is dedicated to constructing and delivering robust, resilient naval ships and technologies that safeguard the United States' interests across various domains. The company operates through three segments: Ingalls, Newport News, and Mission Technologies. Ingalls, the largest shipbuilder in the U.S., boasts a rich history of building and delivering non-nuclear ships for the U.S. Navy and Coast Guard. This segment specializes in designing and constructing amphibious...

Read more

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 1.20B provides robust 0.41x coverage of total debt 2.92B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 9.40B provides 3.22x coverage of total debt 2.92B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 1.20B provides exceptional 11.39x coverage of interest expenses 105M, showing strong debt service capability.
  • Operating cash flow of 1.20B provides strong 22.15x coverage of stock compensation 54M, indicating sustainable incentive practices.
  • Tangible assets of 9.40B provide exceptional 7.71x coverage of deferred revenue 1.22B, showing strong service capability backing.

Bear case

  • Operating cash flow of 1.20B barely covers its investment activities of (521M), with a coverage ratio of -2.30, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.20B provides thin coverage of dividend payments of (213M) with a -5.62 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 774M provide limited coverage of acquisition spending of (132M), which is -5.86x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 1.20B provides insufficient coverage of deferred revenue obligations of 1.22B, which is 0.98x, raising concerns about future service delivery capabilities.
  • Operating earnings of 882M show weak coverage of depreciation charges of 329M, with a 2.68 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Aerospace & Defense
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GE General Electric Co 340.73 Bn 39.15 7.43 20.49 Bn
2 RTX RTX Corp 266.41 Bn 39.57 3.01 39.51 Bn
3 BA Boeing Co 184.47 Bn 97.60 2.06 54.10 Bn
4 LMT Lockheed Martin Corp 145.11 Bn 28.92 1.93 21.70 Bn
5 HWM Howmet Aerospace Inc. 107.72 Bn 167.79 15.89 3.19 Bn
6 GD General Dynamics Corp 104.16 Bn 30.88 2.67 8.01 Bn
7 NOC Northrop Grumman Corp /De/ 101.77 Bn 24.33 2.43 17.02 Bn
8 TDG TransDigm Group INC 74.73 Bn 41.34 8.20 30.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.43 3.14
EV to Cash from Ops. EV/CFO 15.26 76.41
EV to Debt EV to Debt 6.24 80.89
EV to EBIT EV/EBIT 20.69 11.31
EV to EBITDA EV/EBITDA 18.51 30.07
EV to Free Cash Flow [EV/FCF] EV/FCF 22.81 86.36
EV to Market Cap EV to Market Cap 1.17 1.07
EV to Revenue EV/Rev 1.46 10.58
Price to Book Value [P/B] P/B 3.08 5.81
Price to Earnings [P/E] P/E 25.85 18.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.84 -3.22
Dividend Payout Ratio % Div Payout % (Qtr) 35.30 19.41
Dividend per Basic Share Div per Share (Qtr) 5.43 0.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 26.68 11.64
Interest Coverage Int. cover (Qtr) 8.40 -13.61
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -12.18 -65.17
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -6.86 1,593.29
Dividend Growth (1y) % Div 1y % (Qtr) 3.43 1.86
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 8.79 -43.11
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 14.52 19.42
EBIT Growth (1y) % EBIT 1y % (Qtr) 19.51 -34.51
EBT Growth (1y) % EBT 1y % (Qtr) 20.84 -35.59
EPS Growth (1y) % EPS 1y % (Qtr) 10.24 -112.67
FCF Growth (1y) % FCF 1y % (Qtr) 1,900.00 27.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.31 -0.19
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.98 0.51
Cash Payout Ratio Cash Payout (Qtr) 0.13 0.03
Cash Ratio Cash Ratio (Qtr) 0.25 1.78
Current Ratio Curr Ratio (Qtr) 1.13 3.63
Debt to Equity Ratio Debt/Equity (Qtr) 0.58 0.29
Interest Cover Ratio Int Coverage (Qtr) 8.40 -13.61
Times Interest Earned Times Interest Earned (Qtr) 8.40 -13.61
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 9.70 -345.58
EBIT Margin % EBIT Margin % (Qtr) 7.07 -382.34
EBT Margin % EBT Margin % (Qtr) 6.22 -387.64
Gross Margin % Gross Margin % (Qtr) 12.70 -33.21
Net Profit Margin % Net Margin % (Qtr) 4.80 -388.96