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Reasons to Hold Huntington Ingalls (HII) in Your Portfolio
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Huntington Ingalls Industries (HII - Free Report) , with rising earnings estimates, robust ROE and impressive backlog count, offers an opportunity to keep it on your watchlist in the Aerospace Defense industry.
Let’s focus on the reasons that make this Zacks Rank #3 (Hold) stock a solid investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for HII’s first-quarter 2024 earnings per share (EPS) has increased 0.3% to $3.49 in the past 30 days. The Zacks Consensus Estimate for HII’s total revenues for the first quarter of 2024 stands at $2.80 billion, which indicates year-over-year growth of 4.7%.
The company’s long-term (three to five years) earnings growth is pegged at 6.5%. It delivered an average earnings surprise of 20.64% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, HII’s ROE is 18.12% compared to its industry average of 11.11%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Dividend History
Huntington Ingalls has been increasing shareholders’ value through dividend payments. In February 2024, HII announced a quarterly dividend of $1.30 per share and an annual dividend of $5.20 per share. HII’s current dividend yield is 1.81%, better than the Zacks S&P 500 composite’s yield of 1.30%.
Rising Backlog
With the strong demand that Huntington Ingalls products enjoy, the company’s order growth remains solid. The value of the company’s new contract awards won in 2023 was approximately $12.5 billion. This resulted in a solid backlog of $48.12 billion as of Dec 31, 2023. Such a significant backlog count indicates solid revenue growth for the company in the upcoming years.
Debt Position
HII’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 10. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
At the end of the fourth quarter of 2023, HII’s total debt to capital was 37.4%, much better than the industry’s average of 53.62%.
Price Performance
In the past six month, HII shares have rallied 42.6% compared with its industry’s average rise of 18.6%.
Textron’s long-term earnings growth rate is pegged at 10.1%. The Zacks Consensus Estimate for TXT’s 2024 sales is pegged at $14.64 billion, which indicates a year-over-year improvement of 7%.
Leidos’ long-term earnings growth rate is pegged at 9.3%. The Zacks Consensus Estimate for LDOS’ 2024 sales is pegged at $15.97 billion, which suggests a year-over-year improvement of 3.5%.
Safran’s long-term earnings growth rate is pegged at 30.2%. The Zacks Consensus Estimate for SAFRY’s 2024 sales is pegged at $29.4 billion, which implies a year-over-year improvement of 42.9%.
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Reasons to Hold Huntington Ingalls (HII) in Your Portfolio
Huntington Ingalls Industries (HII - Free Report) , with rising earnings estimates, robust ROE and impressive backlog count, offers an opportunity to keep it on your watchlist in the Aerospace Defense industry.
Let’s focus on the reasons that make this Zacks Rank #3 (Hold) stock a solid investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for HII’s first-quarter 2024 earnings per share (EPS) has increased 0.3% to $3.49 in the past 30 days. The Zacks Consensus Estimate for HII’s total revenues for the first quarter of 2024 stands at $2.80 billion, which indicates year-over-year growth of 4.7%.
The company’s long-term (three to five years) earnings growth is pegged at 6.5%. It delivered an average earnings surprise of 20.64% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, HII’s ROE is 18.12% compared to its industry average of 11.11%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Dividend History
Huntington Ingalls has been increasing shareholders’ value through dividend payments. In February 2024, HII announced a quarterly dividend of $1.30 per share and an annual dividend of $5.20 per share. HII’s current dividend yield is 1.81%, better than the Zacks S&P 500 composite’s yield of 1.30%.
Rising Backlog
With the strong demand that Huntington Ingalls products enjoy, the company’s order growth remains solid. The value of the company’s new contract awards won in 2023 was approximately $12.5 billion. This resulted in a solid backlog of $48.12 billion as of Dec 31, 2023. Such a significant backlog count indicates solid revenue growth for the company in the upcoming years.
Debt Position
HII’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 10. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
At the end of the fourth quarter of 2023, HII’s total debt to capital was 37.4%, much better than the industry’s average of 53.62%.
Price Performance
In the past six month, HII shares have rallied 42.6% compared with its industry’s average rise of 18.6%.
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Stocks to Consider
A few better-ranked stocks related to the same industry are Textron (TXT - Free Report) , Leidos (LDOS - Free Report) and Safran (SAFRY - Free Report) , each holding a Zacks Rank #2 (Buy)at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Textron’s long-term earnings growth rate is pegged at 10.1%. The Zacks Consensus Estimate for TXT’s 2024 sales is pegged at $14.64 billion, which indicates a year-over-year improvement of 7%.
Leidos’ long-term earnings growth rate is pegged at 9.3%. The Zacks Consensus Estimate for LDOS’ 2024 sales is pegged at $15.97 billion, which suggests a year-over-year improvement of 3.5%.
Safran’s long-term earnings growth rate is pegged at 30.2%. The Zacks Consensus Estimate for SAFRY’s 2024 sales is pegged at $29.4 billion, which implies a year-over-year improvement of 42.9%.