HUNTINGTON INGALLS INDUSTRIE (HII) Stock Fundamental Analysis
NYSE:HII - New York Stock Exchange, Inc. - US4464131063 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to HII. HII was compared to 64 industry peers in the Aerospace & Defense industry. HII has a medium profitability rating, but doesn't score so well on its financial health evaluation. HII has a valuation in line with the averages, but it does not seem to be growing. Finally HII also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
HII had positive earnings in the past year.
HII had a positive operating cash flow in the past year.
HII had positive earnings in each of the past 5 years.
Each year in the past 5 years HII had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 4.51%, HII is doing good in the industry, outperforming 64.06% of the companies in the same industry.
The Return On Equity of HII (11.44%) is better than 73.44% of its industry peers.
HII has a Return On Invested Capital of 4.40%. This is comparable to the rest of the industry: HII outperforms 43.75% of its industry peers.
HII had an Average Return On Invested Capital over the past 3 years of 5.76%. This is below the industry average of 8.39%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.51% | ||
| ROE | 11.44% | ||
| ROIC | 4.4% |
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 (4.76%) which is in line with its industry peers.
HII's Profit Margin has declined in the last couple of years.
HII has a Operating Margin (4.29%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of HII has declined.
HII has a Gross Margin of 12.81%. This is in the lower half of the industry: HII underperforms 79.69% of its industry peers.
HII's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.29% | ||
| PM (TTM) | 4.76% | ||
| GM | 12.81% |
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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HII is destroying value.
HII has less shares outstanding than it did 1 year ago.
The number of shares outstanding for HII has been reduced compared to 5 years ago.
The debt/assets ratio for HII is higher compared to a year ago.
2.2 Solvency
HII has an Altman-Z score of 2.44. 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.
HII has a worse Altman-Z score (2.44) than 64.06% of its industry peers.
HII has a Debt/Equity ratio of 0.57. This is a neutral value indicating HII is somewhat dependend on debt financing.
HII has a Debt to Equity ratio of 0.57. This is comparable to the rest of the industry: HII outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.44 |
ROIC/WACC0.46
WACC9.53%
2.3 Liquidity
A Current Ratio of 1.07 indicates that HII should not have too much problems paying its short term obligations.
HII has a Current ratio of 1.07. This is amonst the worse of the industry: HII underperforms 84.38% of its industry peers.
A Quick Ratio of 0.99 indicates that HII may have some problems paying its short term obligations.
HII's Quick ratio of 0.99 is on the low side compared to the rest of the industry. HII is outperformed by 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
The earnings per share for HII have decreased strongly by -21.76% in the last year.
HII shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.09% yearly.
HII shows a decrease in Revenue. In the last year, the revenue decreased by -1.04%.
The Revenue has been growing slightly by 5.33% on average over the past years.
EPS 1Y (TTM)-21.76%
EPS 3Y1.07%
EPS 5Y-0.09%
EPS Q2Q%-2.07%
Revenue 1Y (TTM)-1.04%
Revenue growth 3Y6.59%
Revenue growth 5Y5.33%
Sales Q2Q%-2.53%
3.2 Future
The Earnings Per Share is expected to grow by 11.29% on average over the next years. This is quite good.
HII is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.35% yearly.
EPS Next Y5.4%
EPS Next 2Y11.42%
EPS Next 3Y12.69%
EPS Next 5Y11.29%
Revenue Next Year2.66%
Revenue Next 2Y3.63%
Revenue Next 3Y4.32%
Revenue Next 5Y4.35%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
Based on the Price/Earnings ratio of 16.52, the valuation of HII can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of HII indicates a rather cheap valuation: HII is cheaper than 92.19% of the companies listed in the same industry.
HII is valuated rather cheaply when we compare the Price/Earnings ratio to 26.57, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.23, which indicates a correct valuation of HII.
95.31% of the companies in the same industry are more expensive than HII, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.41, HII is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.52 | ||
| Fwd PE | 13.23 |
4.2 Price Multiples
75.00% of the companies in the same industry are more expensive than HII, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.73 |
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.
A more expensive valuation may be justified as HII's earnings are expected to grow with 12.69% in the coming years.
PEG (NY)3.06
PEG (5Y)N/A
EPS Next 2Y11.42%
EPS Next 3Y12.69%
5. Dividend
5.1 Amount
HII has a Yearly Dividend Yield of 2.36%. Purely for dividend investing, there may be better candidates out there.
HII's Dividend Yield is rather good when compared to the industry average which is at 1.29. HII pays more dividend than 95.31% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, HII has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.36% |
5.2 History
On average, the dividend of HII grows each year by 7.82%, which is quite nice.
HII has paid a dividend for at least 10 years, which is a reliable track record.
HII has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.82%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
38.10% of the earnings are spent on dividend by HII. This is a low number and sustainable payout ratio.
HII's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP38.1%
EPS Next 2Y11.42%
EPS Next 3Y12.69%
229.26
-3.47 (-1.49%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners96.99%
Inst Owner Change3.59%
Ins Owners0.75%
Ins Owner Change4.37%
Market Cap9.00B
Analysts70.59
Price Target244.7 (6.73%)
Short Float %4.6%
Short Ratio2.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.36% |
Yearly Dividend5.23
Dividend Growth(5Y)7.82%
DP38.1%
Div Incr Years12
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)9.1%
Min EPS beat(2)-10.56%
Max EPS beat(2)28.76%
EPS beat(4)2
Avg EPS beat(4)0.96%
Min EPS beat(4)-34.31%
Max EPS beat(4)28.76%
EPS beat(8)6
Avg EPS beat(8)10.41%
EPS beat(12)8
Avg EPS beat(12)9.74%
EPS beat(16)11
Avg EPS beat(16)10.78%
Revenue beat(2)0
Avg Revenue beat(2)-2.82%
Min Revenue beat(2)-3.02%
Max Revenue beat(2)-2.63%
Revenue beat(4)1
Avg Revenue beat(4)-1.77%
Min Revenue beat(4)-5.04%
Max Revenue beat(4)3.62%
Revenue beat(8)4
Avg Revenue beat(8)1.44%
Revenue beat(12)7
Avg Revenue beat(12)1.19%
Revenue beat(16)9
Avg Revenue beat(16)0.86%
PT rev (1m)0.05%
PT rev (3m)20.85%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)-4.39%
EPS NY rev (1m)0%
EPS NY rev (3m)5.9%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)-2.48%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.52 | ||
| Fwd PE | 13.23 | ||
| P/S | 0.78 | ||
| P/FCF | N/A | ||
| P/OCF | 44.98 | ||
| P/B | 1.88 | ||
| P/tB | 6.59 | ||
| EV/EBITDA | 14.73 |
EPS(TTM)13.88
EY6.05%
EPS(NY)17.33
Fwd EY7.56%
FCF(TTM)-4.05
FCFYN/A
OCF(TTM)5.1
OCFY2.22%
SpS292.15
BVpS121.64
TBVpS34.79
PEG (NY)3.06
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.51% | ||
| ROE | 11.44% | ||
| ROCE | 5.32% | ||
| ROIC | 4.4% | ||
| ROICexc | 4.48% | ||
| ROICexgc | 7.17% | ||
| OM | 4.29% | ||
| PM (TTM) | 4.76% | ||
| GM | 12.81% | ||
| FCFM | N/A |
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 | 0.57 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.3 | ||
| Cap/Depr | 110.46% | ||
| Cap/Sales | 3.13% | ||
| Interest Coverage | 4.97 | ||
| Cash Conversion | 24.48% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 2.44 |
F-Score4
WACC9.53%
ROIC/WACC0.46
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)-21.76%
EPS 3Y1.07%
EPS 5Y-0.09%
EPS Q2Q%-2.07%
EPS Next Y5.4%
EPS Next 2Y11.42%
EPS Next 3Y12.69%
EPS Next 5Y11.29%
Revenue 1Y (TTM)-1.04%
Revenue growth 3Y6.59%
Revenue growth 5Y5.33%
Sales Q2Q%-2.53%
Revenue Next Year2.66%
Revenue Next 2Y3.63%
Revenue Next 3Y4.32%
Revenue Next 5Y4.35%
EBIT growth 1Y-35.01%
EBIT growth 3Y1.12%
EBIT growth 5Y-8.14%
EBIT Next Year69.94%
EBIT Next 3Y25.41%
EBIT Next 5Y18.04%
FCF growth 1Y-128.6%
FCF growth 3Y-60.72%
FCF growth 5Y-41.08%
OCF growth 1Y-76.19%
OCF growth 3Y-19.73%
OCF growth 5Y-15.2%