Reasons to Include Huntington Ingalls Stock in Your Portfolio

Core Viewpoint - Huntington Ingalls Industries (HII) presents a strong investment opportunity in the Aerospace Defense industry due to rising earnings estimates, robust return on equity (ROE), effective debt management, a solid backlog, and shareholder-friendly initiatives [1] Earnings Growth and Revenue Forecast - The Zacks Consensus Estimate for HII's 2025 earnings per share (EPS) has increased by 3.3% to $14.31 per share over the past 30 days [2] - The total revenue estimate for HII in 2025 is $11.91 billion, reflecting a year-over-year growth of 3.3% [2] - HII's earnings growth rate over the next three to five years is projected at 11% [3] - The company has consistently surpassed earnings expectations, achieving an average earnings surprise of 4.20% in the last four quarters [3] Return on Equity - HII's current ROE stands at 12.26%, outperforming the industry average of 10.75%, indicating more effective use of funds compared to peers [4] Shareholder Initiatives - HII has been enhancing shareholder value through dividends, currently paying a quarterly dividend of $1.35 per share, which translates to an annualized dividend of $5.40 [5] - The company's dividend yield is 2.40%, surpassing the Zacks S&P 500 Composite's average of 1.27% [5] - In the first quarter of 2025, HII paid dividends totaling $53 million [5] Backlog and Order Growth - HII's order growth remains strong, with new contract awards valued at nearly $2.1 billion in the first quarter of 2025, leading to a total backlog of $48.05 billion as of March 31, 2025 [6] - This significant backlog is favorable for the company's revenue generation prospects in the coming years [6] Debt Profile - HII's total debt to capital ratio is 40.15%, which is better than the industry average of 52.09% [7] - The times interest earned (TIE) ratio at the end of the first quarter of 2025 was 7.3, indicating the company can comfortably meet its interest payment obligations [7] Stock Performance - Over the past three months, HII shares have increased by 28%, significantly outperforming the industry's growth of 8% [8]