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Relative valuation derived from Industrials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
10.8%
Sector: 8.9%
Dividend Analysis audit
GROWTH
1.88%
Trailing Yield
$1.88
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
54%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, HUNTINGTON INGALLS INDUSTRIES, INC. (HII) receives a "Hold" rating with a composite score of 53.9/100, ranked #1039 out of 4446 stocks. Key factor scores: Quality 50/100, Value 57/100, Momentum 70/100. This is quantitative analysis only — not investment advice.
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does HUNTINGTON INGALLS INDUSTRIES, INC. Do?
Huntington Ingalls Industries, Inc. engages in designing, building, overhauling, and repairing military ships 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; expeditionary warfare 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 of ships. In addition, the company offers naval nuclear support services, including fleet services comprising design, construction, maintenance, and disposal activities for in-service the U.S. Navy nuclear ships; and maintenance services on nuclear reactor prototypes. Further, it provides life-cycle sustainment services to the U.S. Navy fleet and other maritime customers; high-end information technology and mission-based solutions for Department of Defense (DoD), intelligence, and federal civilian customers; nuclear management and operations and environmental management services for the Department of Energy, DoD, state and local governments, and private sector companies; defense and federal solutions; and unmanned systems. Huntington Ingalls Industries, Inc. was founded in 1886 and is headquartered in Newport News, Virginia. HUNTINGTON INGALLS INDUSTRIES, INC. (HII) is classified as a large-cap stock in the Industrials sector, specifically within the Shipbuilding, Railroad Equipment industry. The company is led by CEO Christopher D. Kastner and employs approximately 43,000 people, headquartered in Newport News, Virginia. With a market capitalization of $15.5B, HII is one of the prominent companies in the Industrials sector.
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) Stock Rating — Hold (April 2026)
As of April 2026, HUNTINGTON INGALLS INDUSTRIES, INC. receives a Hold rating with a composite score of 53.9/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.HII ranks #1,039 out of 4,446 stocks in our coverage universe. Within the Industrials sector, HUNTINGTON INGALLS INDUSTRIES, INC. ranks #174 of 752 stocks, placing it in the top quartile of its Industrials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
HII Stock Price and 52-Week Range
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) currently trades at $394.41. The stock lost $8.96 (2.2%) in the most recent trading session. The 52-week high for HII is $451.86, which means the stock is currently trading -12.7% from its annual peak. The 52-week low is $177.42, putting the stock 122.3% above its annual trough. Recent trading volume was 432K shares, suggesting relatively thin trading activity.
Is HII Overvalued or Undervalued? — Valuation Analysis
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) carries a value factor score of 57/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 28.96x, compared to the Industrials sector average of 28.33x — a premium of 2%. The price-to-book ratio stands at 3.12x, versus the sector average of 2.23x. The price-to-sales ratio is 1.35x, compared to 0.50x for the average Industrials stock. On an enterprise value basis, HII trades at 27.94x EV/EBITDA, versus 5.70x for the sector.
Overall, HII's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
HUNTINGTON INGALLS INDUSTRIES, INC. Profitability — ROE, Margins, and Quality Score
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 10.8%, compared to the Industrials sector average of 8.9%, which is within a healthy range. Return on assets (ROA) comes in at 4.3% versus the sector average of 3.3%.
On a margin basis, HUNTINGTON INGALLS INDUSTRIES, INC. reports gross margins of 12.0%, compared to 35.8% for the sector. The operating margin is 4.8% (sector: 6.2%). Net profit margin stands at 4.6%, versus 3.9% for the average Industrials stock. Revenue growth is running at 7.2% on a trailing basis, compared to 6.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
HII Debt, Balance Sheet, and Financial Health
HUNTINGTON INGALLS INDUSTRIES, INC. has a debt-to-equity ratio of 151.0%, compared to the Industrials sector average of 70.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.13x, suggesting adequate working capital coverage. Total debt on the balance sheet is $2.70B. Cash and equivalents stand at $312M.
HII has a beta of 0.67, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for HUNTINGTON INGALLS INDUSTRIES, INC. is 76/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
HUNTINGTON INGALLS INDUSTRIES, INC. Revenue and Earnings History — Quarterly Trend
In TTM 2026, HUNTINGTON INGALLS INDUSTRIES, INC. reported revenue of $11.76B and earnings per share (EPS) of $15.39. Net income for the quarter was $547M. Gross margin was 12.0%. Operating income came in at $567M.
In FY 2025, HUNTINGTON INGALLS INDUSTRIES, INC. reported revenue of $12.48B and earnings per share (EPS) of $15.39. Net income for the quarter was $605M. Revenue grew 8.2% year-over-year compared to FY 2024. Operating income came in at $657M.
In Q3 2025, HUNTINGTON INGALLS INDUSTRIES, INC. reported revenue of $3.19B and earnings per share (EPS) of $3.69. Net income for the quarter was $145M. Revenue grew 16.1% year-over-year compared to Q3 2024. Operating income came in at $161M.
In Q2 2025, HUNTINGTON INGALLS INDUSTRIES, INC. reported revenue of $3.08B and earnings per share (EPS) of $3.86. Net income for the quarter was $152M. Revenue grew 3.5% year-over-year compared to Q2 2024. Operating income came in at $163M.
Over the past 8 quarters, HUNTINGTON INGALLS INDUSTRIES, INC. has demonstrated a growth trajectory, with revenue expanding from $2.98B to $11.76B. Investors analyzing HII stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
HII Dividend Yield and Income Analysis
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) currently pays a dividend yield of 1.9%. At this yield, a $10,000 investment in HII stock would generate approximately $$188.00 in annual dividend income.
HII Momentum and Technical Analysis Profile
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) has a momentum factor score of 70/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 30/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 23/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
HII vs Competitors — Industrials Sector Ranking and Peer Comparison
Comparing HII against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full HII vs S&P 500 (SPY) comparison to assess how HUNTINGTON INGALLS INDUSTRIES, INC. stacks up against the broader market across all factor dimensions.
HII Next Earnings Date
No upcoming earnings date has been announced for HUNTINGTON INGALLS INDUSTRIES, INC. (HII) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy HII? — Investment Thesis Summary
HUNTINGTON INGALLS INDUSTRIES, INC. presents a balanced picture with arguments on both sides. Price momentum is positive at 70/100, suggesting the trend favors buyers. Low volatility (stability score 76/100) reduces downside risk.
In summary, HUNTINGTON INGALLS INDUSTRIES, INC. (HII) earns a Hold rating with a composite score of 53.9/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on HII stock.
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Institutional Research Dossier
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Huntington Ingalls Industries (HII) receives a Hold rating, reflecting a balanced view of its strong market position as a leading military shipbuilder and its current valuation. While HII benefits from a duopoly in nuclear-powered shipbuilding and consistent government demand, its free cash flow generation is concerning, and its debt levels are elevated compared to the sector. The company's future performance hinges on efficient contract execution and effective capital allocation to improve shareholder returns.
The company's reliance on government contracts provides stability but also exposes it to political and budgetary risks. HII's ability to navigate these challenges while improving its financial metrics will be crucial in determining its long-term investment appeal. The current valuation appears fair, considering both its strengths and weaknesses, justifying the Hold rating until clearer signs of improved financial performance emerge.
Business Strategy & Overview
Huntington Ingalls Industries operates primarily as a designer, builder, and maintainer of military ships for the U.S. Navy and Coast Guard. Its core business revolves around two main shipbuilding divisions: Ingalls Shipbuilding, which focuses on non-nuclear ships like amphibious assault ships and surface combatants, and Newport News Shipbuilding, which specializes in nuclear-powered aircraft carriers and submarines. This duopoly position with General Dynamics Electric Boat in nuclear shipbuilding creates a significant barrier to entry and ensures a steady stream of government contracts.
HII's revenue is almost entirely derived from U.S. government contracts, making it heavily dependent on defense spending and budgetary allocations. The company's strategy involves maintaining strong relationships with the Navy and Coast Guard, securing long-term contracts, and efficiently executing projects to maximize profitability. The Technical Solutions segment provides additional revenue streams through naval nuclear support services, life-cycle sustainment, IT solutions, and unmanned systems, diversifying the company's offerings within the defense sector.
The company's strategic positioning is further strengthened by its focus on advanced technologies and capabilities, such as digital shipbuilding and advanced manufacturing techniques. These initiatives aim to improve efficiency, reduce costs, and enhance the quality of its products. HII also invests in research and development to stay ahead of technological advancements and maintain its competitive edge in the shipbuilding industry.
HII's product pipeline is driven by the Navy's long-term shipbuilding plans, which typically span several decades. This provides a degree of predictability in future revenue streams. Key programs include the Columbia-class submarine, the Ford-class aircraft carrier, and the Arleigh Burke-class destroyer. The company's ability to successfully execute these programs is critical to its financial performance and reputation.
The industry context is characterized by high barriers to entry, long lead times, and significant capital investments. The shipbuilding industry is also subject to stringent regulations and oversight, requiring companies to maintain high standards of quality and safety. HII's experience and expertise in navigating these challenges provide a competitive advantage.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
7.2%
Sector: 6.4%
+13% VS SCTR
Economic Moat Analysis
Huntington Ingalls Industries possesses a Narrow economic moat, primarily derived from its intangible assets and efficient scale. The company's expertise in nuclear-powered shipbuilding, particularly through its Newport News Shipbuilding division, represents a significant barrier to entry. The regulatory hurdles, specialized knowledge, and substantial capital investments required to build nuclear-powered vessels limit the number of potential competitors, effectively creating a duopoly with General Dynamics Electric Boat.
The intangible assets stem from decades of experience in designing, building, and maintaining complex military ships. This accumulated knowledge and expertise are difficult to replicate, providing HII with a competitive advantage in bidding for and executing government contracts. The company's reputation for quality and reliability further strengthens its position with the U.S. Navy and Coast Guard.
Efficient scale also contributes to HII's moat. The shipbuilding industry requires massive infrastructure and specialized equipment, making it uneconomical for new entrants to compete effectively. HII's existing facilities and established supply chain provide a cost advantage over potential rivals. The company's ability to spread fixed costs over a large volume of production enhances its profitability.
However, the moat is not considered wide due to the company's heavy reliance on government contracts. While this provides a stable revenue stream, it also exposes HII to political and budgetary risks. Changes in defense spending priorities or contract terms could significantly impact the company's financial performance. Furthermore, HII's dependence on a single customer limits its pricing power and bargaining leverage.
The moat's strength is also influenced by the company's ability to maintain its technological edge and efficiently execute projects. Any significant delays or cost overruns could erode its reputation and competitive advantage. While HII's position in nuclear shipbuilding provides a degree of insulation, it must continue to invest in innovation and operational excellence to sustain its moat.
Financial Health & Profitability
Huntington Ingalls Industries' financial health presents a mixed picture. Revenue has shown consistent growth, with FY2025 revenue reaching $12.48 billion, up from $11.54 billion in FY2024 and $11.45 billion in FY2023. This growth indicates a healthy demand for the company's products and services. Net income has also generally increased, reaching $605 million in FY2025 compared to $550 million in FY2024, demonstrating improved profitability.
However, the company's free cash flow (FCF) is a significant concern. The TTM FCF is negative at -$455.56 million, and FY2024 also showed negative FCF of -$472.38 million. This indicates that the company is not generating enough cash from its operations to cover its capital expenditures and other obligations. This negative FCF trend needs to be addressed to ensure long-term financial stability.
HII's debt levels are relatively high, with total debt at $2.70 billion and a debt-to-equity ratio of 151.00, significantly higher than the sector average of 70.00. This high leverage increases the company's financial risk and could limit its ability to invest in future growth opportunities. The current ratio of 1.13 indicates adequate short-term liquidity, but the high debt levels warrant close monitoring.
The company's gross margin of 12.0% is significantly lower than the sector average of 35.8%, indicating potential inefficiencies in its cost structure. However, its net margin of 4.6% is slightly higher than the sector average of 3.7%, suggesting effective cost management in other areas. The operating margin of 4.8% is below the sector average of 6.2%, highlighting the need for further improvements in operational efficiency.
ROE of 10.8% is slightly above the sector average of 9.2%, indicating that the company is generating reasonable returns on equity. However, the negative FCF and high debt levels raise concerns about the sustainability of these returns. The quarterly financial history shows consistent revenue and net income, but the lack of FCF data in the quarterly reports makes it difficult to assess the underlying cash flow trends.
Valuation Assessment
Huntington Ingalls Industries' valuation appears to be fair, considering its market position and financial performance. The company's P/E ratio of 26.5x is slightly below the sector average of 27.7x, suggesting that the stock is not significantly overvalued compared to its peers. However, the P/E ratio alone does not provide a complete picture, as it does not account for the company's debt levels or cash flow generation.
The EV/EBITDA ratio of 6.1x is slightly above the sector average of 5.7x, indicating that the company may be slightly overvalued on an enterprise value basis. This is likely due to the company's high debt levels, which increase its enterprise value. The negative free cash flow further complicates the valuation assessment, as it makes it difficult to calculate a meaningful FCF yield.
Compared to its historical valuation, HII's current multiples are within a reasonable range. However, the negative FCF is a concern that could put downward pressure on the stock price if it persists. The company's ability to improve its cash flow generation will be crucial in justifying its current valuation.
The market capitalization of $16.01 billion reflects the company's size and market position as a leading military shipbuilder. However, the high debt levels and negative FCF raise questions about the company's long-term value. Investors may be hesitant to pay a premium for the stock until these issues are addressed.
Overall, the valuation appears to be fair, but not compelling. The stock is not significantly overvalued, but it is not a bargain either. The Hold rating reflects this balanced view, as the company's strengths are offset by its weaknesses. Investors should closely monitor the company's cash flow generation and debt levels before making a decision to buy or sell the stock.
Risk & Uncertainty
Huntington Ingalls Industries faces several specific risks that could impact its financial performance and stock price. The most significant risk is its heavy reliance on U.S. government contracts. Changes in defense spending priorities, budgetary constraints, or political factors could lead to reduced contract awards or unfavorable contract terms. Any significant cuts in the Navy's shipbuilding budget could have a material adverse effect on HII's revenue and profitability.
Another key risk is contract execution. Shipbuilding projects are complex and often involve long lead times, making them susceptible to delays, cost overruns, and technical challenges. Any significant delays or cost overruns could erode HII's reputation and competitive advantage, potentially leading to reduced contract awards in the future. The company's ability to efficiently manage its projects and control costs is critical to its success.
HII also faces risks related to its supply chain. Disruptions in the supply of critical materials or components could delay production and increase costs. The company's reliance on a limited number of suppliers for certain key items could also create vulnerabilities. HII needs to effectively manage its supply chain to mitigate these risks.
The company's high debt levels also pose a risk. High leverage increases the company's financial risk and could limit its ability to invest in future growth opportunities. Rising interest rates could further increase the company's debt servicing costs, putting pressure on its profitability. HII needs to manage its debt effectively to maintain its financial stability.
Finally, HII faces risks related to cybersecurity and data breaches. As a defense contractor, the company handles sensitive information and is a potential target for cyberattacks. Any successful cyberattack could compromise sensitive data, disrupt operations, and damage the company's reputation. HII needs to invest in robust cybersecurity measures to protect its data and systems.
Bulls Say / Bears Say
The Bull Case
BULL VIEWHuntington Ingalls benefits from a near-duopoly in nuclear shipbuilding, ensuring a steady stream of government contracts and high barriers to entry.
BULL VIEWIncreased global tensions and modernization efforts by the U.S. Navy will drive sustained demand for HII's shipbuilding and maintenance services.
BULL VIEWHII's Technical Solutions segment provides diversification and growth opportunities in areas like unmanned systems and IT solutions, complementing its core shipbuilding business.
The Bear Case
BEAR VIEWHII's negative free cash flow generation raises concerns about its financial health and ability to fund future investments and shareholder returns.
BEAR VIEWThe company's high debt levels and reliance on government contracts expose it to significant financial and political risks.
BEAR VIEWCost overruns and project delays on major shipbuilding programs could erode HII's profitability and damage its reputation with the U.S. Navy.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score HII and 4,400+ other equities.
HUNTINGTON INGALLS INDUSTRIES, INC. exhibits a 151% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
4.3%
Sector: 3.3%
Gross Margin
Pricing power and cost efficiency
12.0%
Sector: 35.8%
Operating Margin
Core business profitability
4.8%
Sector: 6.2%
Net Margin
Bottom-line profitability
4.6%
Sector: 3.9%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $188 annually in dividends at the current trailing rate.
