HUNTINGTON INGALLS INDUSTRIE (HII) Stock Fundamental Analysis
NYSE:HII - New York Stock Exchange, Inc. - US4464131063 - Common Stock - Currency: USD
Overall HII gets a fundamental rating of 4 out of 10. We evaluated HII against 65 industry peers in the Aerospace & Defense industry. While HII is still in line with the averages on profitability rating, there are concerns on its financial health. HII has a decent growth rate and is not valued too expensively. Finally HII also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
HII had positive earnings in the past year.
In the past year HII had a positive cash flow from operations.
In the past 5 years HII has always been profitable.
Each year in the past 5 years HII had a positive operating cash flow.
1.2 Ratios
HII has a Return On Assets of 4.53%. This is comparable to the rest of the industry: HII outperforms 54.69% of its industry peers.
HII has a better Return On Equity (11.79%) than 73.44% of its industry peers.
The Return On Invested Capital of HII (4.39%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for HII is below the industry average of 7.98%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.53% | ||
| ROE | 11.79% | ||
| ROIC | 4.39% |
ROA(3y)5.31%
ROA(5y)5.92%
ROE(3y)15.01%
ROE(5y)20.2%
ROIC(3y)5.76%
ROIC(5y)6.54%
1.3 Margins
HII has a Profit Margin (4.77%) which is comparable to the rest of the industry.
HII's Profit Margin has declined in the last couple of years.
The Operating Margin of HII (4.21%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of HII has declined.
HII has a worse Gross Margin (12.57%) than 76.56% of its industry peers.
In the last couple of years the Gross Margin of HII has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.21% | ||
| PM (TTM) | 4.77% | ||
| GM | 12.57% |
OM growth 3Y-5.13%
OM growth 5Y-12.78%
PM growth 3Y-5.84%
PM growth 5Y-5.02%
GM growth 3Y-4.35%
GM growth 5Y-6.08%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HII is destroying value.
The number of shares outstanding for HII has been reduced compared to 1 year ago.
The number of shares outstanding for HII has been reduced compared to 5 years ago.
HII has a worse debt/assets ratio than last year.
2.2 Solvency
HII has an Altman-Z score of 2.25. This is not the best score and indicates that HII is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.25, HII is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
HII has a debt to FCF ratio of 123.19. This is a negative value and a sign of low solvency as HII would need 123.19 years to pay back of all of its debts.
HII has a Debt to FCF ratio (123.19) which is comparable to the rest of the industry.
HII has a Debt/Equity ratio of 0.58. This is a neutral value indicating HII is somewhat dependend on debt financing.
The Debt to Equity ratio of HII (0.58) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 123.19 | ||
| Altman-Z | 2.25 |
ROIC/WACC0.51
WACC8.63%
2.3 Liquidity
HII has a Current Ratio of 1.08. This is a normal value and indicates that HII is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.08, HII is not doing good in the industry: 79.69% of the companies in the same industry are doing better.
A Quick Ratio of 1.01 indicates that HII should not have too much problems paying its short term obligations.
The Quick ratio of HII (1.01) is worse than 64.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
The earnings per share for HII have decreased strongly by -18.36% in the last year.
The Earnings Per Share has been decreasing by -0.09% on average over the past years.
The Revenue has been growing slightly by 0.71% in the past year.
Measured over the past years, HII shows a small growth in Revenue. The Revenue has been growing by 5.33% on average per year.
EPS 1Y (TTM)-18.36%
EPS 3Y1.07%
EPS 5Y-0.09%
EPS Q2Q%-54.35%
Revenue 1Y (TTM)0.71%
Revenue growth 3Y6.59%
Revenue growth 5Y5.33%
Sales Q2Q%-5.45%
3.2 Future
Based on estimates for the next years, HII will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.83% on average per year.
Based on estimates for the next years, HII will show a small growth in Revenue. The Revenue will grow by 6.07% on average per year.
EPS Next Y3.57%
EPS Next 2Y10.66%
EPS Next 3Y10.18%
EPS Next 5Y15.83%
Revenue Next Year4.3%
Revenue Next 2Y4.28%
Revenue Next 3Y4.76%
Revenue Next 5Y6.07%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 12.20 indicates a correct valuation of HII.
93.75% of the companies in the same industry are more expensive than HII, based on the Price/Earnings ratio.
HII is valuated cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 11.78, which indicates a very decent valuation of HII.
Based on the Price/Forward Earnings ratio, HII is valued cheaply inside the industry as 96.88% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, HII is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.2 | ||
| Fwd PE | 11.78 |
4.2 Price Multiples
92.19% of the companies in the same industry are more expensive than HII, based on the Enterprise Value to EBITDA ratio.
HII's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 256.29 | ||
| EV/EBITDA | 11.49 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HII does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)3.42
PEG (5Y)N/A
EPS Next 2Y10.66%
EPS Next 3Y10.18%
5. Dividend
5.1 Amount
HII has a Yearly Dividend Yield of 3.36%.
HII's Dividend Yield is rather good when compared to the industry average which is at 1.45. HII pays more dividend than 96.88% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, HII pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
5.2 History
On average, the dividend of HII grows each year by 7.82%, which is quite nice.
HII has been paying a dividend for at least 10 years, so it has a reliable track record.
HII has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.82%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
37.45% of the earnings are spent on dividend by HII. This is a low number and sustainable payout ratio.
The dividend of HII is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.45%
EPS Next 2Y10.66%
EPS Next 3Y10.18%
170.29
-7.6 (-4.27%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners93.89%
Inst Owner Change-1.25%
Ins Owners0.66%
Ins Owner Change0.52%
Market Cap6.66B
Analysts54
Price Target224.04 (31.56%)
Short Float %2.92%
Short Ratio1.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
Yearly Dividend5.23
Dividend Growth(5Y)7.82%
DP37.45%
Div Incr Years12
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-22.43%
Min EPS beat(2)-34.31%
Max EPS beat(2)-10.56%
EPS beat(4)2
Avg EPS beat(4)-4.07%
Min EPS beat(4)-34.31%
Max EPS beat(4)19.95%
EPS beat(8)6
Avg EPS beat(8)8.11%
EPS beat(12)8
Avg EPS beat(12)8.06%
EPS beat(16)11
Avg EPS beat(16)11.4%
Revenue beat(2)0
Avg Revenue beat(2)-3.83%
Min Revenue beat(2)-5.04%
Max Revenue beat(2)-2.63%
Revenue beat(4)1
Avg Revenue beat(4)-1.15%
Min Revenue beat(4)-5.04%
Max Revenue beat(4)3.62%
Revenue beat(8)5
Avg Revenue beat(8)2.03%
Revenue beat(12)8
Avg Revenue beat(12)1.54%
Revenue beat(16)10
Avg Revenue beat(16)1.14%
PT rev (1m)-1.76%
PT rev (3m)-21.81%
EPS NQ rev (1m)-12.22%
EPS NQ rev (3m)-26.42%
EPS NY rev (1m)-9.62%
EPS NY rev (3m)-9.4%
Revenue NQ rev (1m)-2.64%
Revenue NQ rev (3m)-3.67%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.2 | ||
| Fwd PE | 11.78 | ||
| P/S | 0.58 | ||
| P/FCF | 256.29 | ||
| P/OCF | 16.96 | ||
| P/B | 1.43 | ||
| P/tB | 5.26 | ||
| EV/EBITDA | 11.49 |
EPS(TTM)13.96
EY8.2%
EPS(NY)14.46
Fwd EY8.49%
FCF(TTM)0.66
FCFY0.39%
OCF(TTM)10.04
OCFY5.9%
SpS294.79
BVpS119.24
TBVpS32.35
PEG (NY)3.42
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.53% | ||
| ROE | 11.79% | ||
| ROCE | 5.31% | ||
| ROIC | 4.39% | ||
| ROICexc | 4.83% | ||
| ROICexgc | 8.17% | ||
| OM | 4.21% | ||
| PM (TTM) | 4.77% | ||
| GM | 12.57% | ||
| FCFM | 0.23% |
ROA(3y)5.31%
ROA(5y)5.92%
ROE(3y)15.01%
ROE(5y)20.2%
ROIC(3y)5.76%
ROIC(5y)6.54%
ROICexc(3y)6.16%
ROICexc(5y)7.06%
ROICexgc(3y)11.25%
ROICexgc(5y)12.66%
ROCE(3y)6.97%
ROCE(5y)7.91%
ROICexcg growth 3Y-7.33%
ROICexcg growth 5Y-15.7%
ROICexc growth 3Y-2%
ROICexc growth 5Y-16.81%
OM growth 3Y-5.13%
OM growth 5Y-12.78%
PM growth 3Y-5.84%
PM growth 5Y-5.02%
GM growth 3Y-4.35%
GM growth 5Y-6.08%
F-Score4
Asset Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 123.19 | ||
| Debt/EBITDA | 3.33 | ||
| Cap/Depr | 112.58% | ||
| Cap/Sales | 3.18% | ||
| Interest Coverage | 4.81 | ||
| Cash Conversion | 48.4% | ||
| Profit Quality | 4.73% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 1.01 | ||
| Altman-Z | 2.25 |
F-Score4
WACC8.63%
ROIC/WACC0.51
Cap/Depr(3y)92.02%
Cap/Depr(5y)106.39%
Cap/Sales(3y)2.8%
Cap/Sales(5y)3.13%
Profit Quality(3y)62.51%
Profit Quality(5y)74.54%
High Growth Momentum
Growth
EPS 1Y (TTM)-18.36%
EPS 3Y1.07%
EPS 5Y-0.09%
EPS Q2Q%-54.35%
EPS Next Y3.57%
EPS Next 2Y10.66%
EPS Next 3Y10.18%
EPS Next 5Y15.83%
Revenue 1Y (TTM)0.71%
Revenue growth 3Y6.59%
Revenue growth 5Y5.33%
Sales Q2Q%-5.45%
Revenue Next Year4.3%
Revenue Next 2Y4.28%
Revenue Next 3Y4.76%
Revenue Next 5Y6.07%
EBIT growth 1Y-34.68%
EBIT growth 3Y1.12%
EBIT growth 5Y-8.14%
EBIT Next Year81.57%
EBIT Next 3Y28.99%
EBIT Next 5Y23.59%
FCF growth 1Y-96.17%
FCF growth 3Y-60.72%
FCF growth 5Y-41.08%
OCF growth 1Y-59.48%
OCF growth 3Y-19.73%
OCF growth 5Y-15.2%