# Huntington Ingalls Industries (HII.US)

Canonical: https://gigainvestors.com/s/HII

Analysis as of: 2026-10-16T07:29:02.140Z. Financial observations: FY2009–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $267.22 per share; close as of 2026-10-15.

Estimated value: low $208.90 per share, central $237.71 per share, high $276.05 per share. Buy at or below the central value $237.71 per share. Valuation as of 2026-10-16T07:29:02.140Z; scenarios are not confidence intervals.

Expected annual return: 9.2% at the stated quote. About 9.2% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 0 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.35×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.12×

- FY2017: 0.12×

- FY2018: 0.11×

- FY2019: 0.08×

- FY2020: 0.08×

- FY2021: 0.05×

- FY2022: 0.05×

- FY2023: 0.07×

- FY2024: 0.05×

- FY2025: 0.05×

### moat: fail

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 23.0%

- ROIC, second-lowest year: 9.9%

- Typical minus recent gross margin: 3.1 pp

- Typical gross margin (annual median): 15.8%

- Recent gross margin (lower of latest and 3-year median): 12.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.6%

- ROIC including acquisitions, ten-year median: 12.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 38.7%

- FY2017: 32.2%

- FY2018: 41.7%

- FY2019: 29.2%

- FY2020: 31.2%

- FY2021: 12.5%

- FY2022: 12.8%

- FY2023: 16.8%

- FY2024: 9.9%

- FY2025: 9.9%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 1.04×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $3.1B

- Net income, five-year total: $3.0B

- Return on incremental invested capital: -5.9%

- Working capital / revenue, annual change: 0.4 pp

- Working capital / revenue, change between three-year averages: 2.9 pp

- Working capital / revenue, final three-year average: 15.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.13×

- FY2023: 1.08×

- FY2024: 0.97×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 38.7% vs 9.9%

- Per-share earnings: 10.46 to 15.39 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.0%

- Ordinary dilution, 5-year annual growth: -0.6%

- Market cap gain: $4.8B

- Cumulative retained earnings: $4.2B

- Diluted shares, 10-year annual growth: -2.0%

- Diluted shares, 5-year annual growth: -0.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 5.0%

- Per-share value change: $4.94

- Per-share value, starting three-year median: $10.46

- Per-share value, ending three-year median: $15.39

- Buybacks concentrated in cheaper years (correlation): 0.20

- Average buyback yield: 2.3%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $2.4B

- Cumulative net income, 10 years: $6.1B

- ROIC, first three-year median: 38.7%

- ROIC, last three-year median: 9.9%

Chart: Earnings per share; fiscal year observations.

- FY2016: $12.14

- FY2017: $10.46

- FY2018: $19.09

- FY2019: $13.26

- FY2020: $17.14

- FY2021: $13.50

- FY2022: $14.44

- FY2023: $17.07

- FY2024: $13.96

- FY2025: $15.39

### accounting: pass

- Sloan accruals: -4.6%

- Receivables to sales index (DSRI): 1.05×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 4.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.98×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.66×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.9%

- FY2017: -5.3%

- FY2018: -1.2%

- FY2019: -4.9%

- FY2020: -4.9%

- FY2021: -2.0%

- FY2022: -1.7%

- FY2023: -2.6%

- FY2024: 1.3%

- FY2025: -4.6%

## Holders

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 40% since Feb 2026 · "These requirements increase our contract performance costs and compliance costs and risks." (SEC filing, Feb 2026) · sales +8.2%

Story as of 2026-10-16T09:58:52.763Z; price observation 2026-10-15.

Price needs cash profits to grow 2.4% a year for ten years

- 2025-04-30: HII is Awarded Contract Modification for Construction of Two Additional Block V Virginia-class Submarines ([globenewswire.com](https://www.globenewswire.com/news-release/2025/04/30/3071966/14858/en/HII-is-Awarded-Contract-Modification-for-Construction-of-Two-Additional-Block-V-Virginia-class-Submarines.html))

- 2025-06-16: # HII secures spot on $379 million US Army training contract ([investing.com](https://www.investing.com/news/company-news/-hii-secures-spot-on-379-million-us-army-training-contract-93CH-4097120))

- 2025-07-31: Huntington Ingalls GAAP EPS of $3.86 beats by $0.57, revenue of $3.1B ([seekingalpha.com](https://seekingalpha.com/news/4475403-huntington-ingalls-gaap-eps-of-3_86-beats-by-0_57-revenue-of-3_1b?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-12-02: Boeing wins $104M US Navy contract; HII secures $91.9M aircraft carrier support award ([seekingalpha.com](https://seekingalpha.com/news/4527444-boeing-wins-104m-us-navy-contract-hii-secures-919m-aircraft-carrier-support-award?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-01-13: HII is Awarded Missile Defense Agency’s SHIELD Contract to Advance Homeland Defense ([finance.yahoo.com](https://finance.yahoo.com/news/hii-awarded-missile-defense-agency-213000043.html))

- 2026-07-06: HII is Awarded Option Year Contract for U.S. Navy Lionfish Unmanned Undersea Vehicle Production ([finance.yahoo.com](https://finance.yahoo.com/technology/articles/hii-awarded-option-contract-u-173000136.html))

### Sales · FY2024–2025

sales +8.2%; source https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm; observed 2026-02-05.

- FY2016: $7.1B 

- FY2017: $7.4B 

- FY2018: $8.2B 

- FY2019: $8.9B 

- FY2020: $9.4B 

- FY2021: $9.5B 

- FY2022: $11B 

- FY2023: $11B 

- FY2024: $12B 

- FY2025: $12B 

### Gross margin · FY2025

gross margin 12.7%; source https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm; observed 2026-02-05.

- FY2016: 20.7% 

- FY2017: 19.1% 

- FY2018: 21.9% 

- FY2019: 17.2% 

- FY2020: 17.8% 

- FY2021: 14.4% 

- FY2022: 13.5% 

- FY2023: 14.4% 

- FY2024: 12.6% 

- FY2025: 12.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in aerospace & defense; annual sales are USD 12.5 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm (filed 2026-02-05); FY2025: revenue 12484000000; grossProfit 1585000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); HII.US: Huntington Ingalls Industries, Inc. designs, builds, overhauls, and repairs military ships in the United States. It operates through three segments: Ingalls, Newport News, and Mission Technologies. The company is involved in the design and construction of non-nuclear ships comprising amphibious assault 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 nuclear-powered aircraft carriers. 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, the company provides C5ISR systems and operations; application of artificial intelligence and machine learning to battlefield decisions; defensive and offensive cyberspace strategies and electronic warfare; uncrewed autonomous systems; live, virtual, and constructive solutions; platform modernization; and critical nuclear operations. The company has a strategic partnership with HD Hyundai Heavy Industries to implement intelligent mechanized welding systems at Huntington Ingalls Industries, Inc.'s Ingalls Shipbuilding division. Huntington Ingalls Industries, Inc. was founded in 1886 and is headquartered in Newport News, Virginia.

### Why customers stay

Margins ranged from 12.6% to 14.4% during 2023–25; it earns 23% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2023: grossProfit / revenue = 14.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2024: grossProfit / revenue = 12.6%.

- Source: https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm (filed 2026-02-05); FY2025: grossProfit / revenue = 12.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); 10-year return on capital observations [[2016,0.38668518924636863],[2017,0.322219053051911],[2018,0.4168898043254377],[2019,0.2919004907622487],[2020,0.31208752612261387],[2021,0.12459561518727828],[2022,0.12798483594772392],[2023,0.1677025742766567],[2024,0.09894497919381279],[2025,0.09873004242138757]]; median 0.2298015325194527. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 13% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm (filed 2026-02-05); Gross margin observations: [[2021,0.14363712725745484],[2022,0.1348819782690146],[2023,0.14370525580583202]]; range within 2 percentage points.

### Where the cash goes

Spends 12.1% of cash earnings on expansion; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2016: growth capex 13249881.117934704; upkeep 271750118.8820653; owner earnings 487249881.1179347. Growth capex / owner earnings = 0.027193195178487242.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2017: growth capex 102548961.44319749; upkeep 279451038.5568025; owner earnings 404548961.4431975. Growth capex / owner earnings = 0.2534896173688394.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2018: growth capex 206439555.1791214; upkeep 256560444.8208786; owner earnings 782439555.1791214. Growth capex / owner earnings = 0.26384089839612196.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2019: growth capex 215105981.9347608; upkeep 314894018.0652392; owner earnings 461105981.9347608. Growth capex / owner earnings = 0.46650008970214335.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2020: growth capex 106000000; upkeep 247000000; owner earnings 696000000. Growth capex / owner earnings = 0.15229885057471265.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2021: growth capex 38000000; upkeep 293000000; owner earnings 544000000. Growth capex / owner earnings = 0.06985294117647059.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2022: growth capex 0; upkeep 284000000; owner earnings 653000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2023: growth capex 0; upkeep 292000000; owner earnings 736000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2024: growth capex 26674594.38439715; upkeep 340325405.61560285; owner earnings 535674594.38439715. Growth capex / owner earnings = 0.04979626561355196.

- Source: https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm (filed 2026-02-05); FY2025: growth capex 73000000; upkeep 329000000; owner earnings 605000000. Growth capex / owner earnings = 0.1206611570247934.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); Dividend observations: [[2016,98000000],[2017,115000000],[2018,132000000],[2019,149000000],[2020,172000000],[2021,186000000],[2022,192000000],[2023,200000000],[2024,206000000],[2025,213000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm (filed 2026-02-05); FY2025: cash repurchases 14000000 USD.

### Are managers owners

Insiders own 0.5% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); HII.US SharesStats.PercentInsiders = 0.482 percentage points; cache date 2026-10-16.

### What could break it

"Changes in estimates used in contract accounting and contract cost growth have affected" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm (filed 2026-02-05); Changes in estimates used in contract accounting and contract cost growth have affected

### What the price says

The price assumes cash profits grow 2.4% yearly over ten years; actual growth was 6.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); Ten-year compound average after fade. Initial solved rate 0.02086569778770451. Price 267.22; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 8.364389233954451 → FY2025 15.39440203562341. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $161.36 per share

- 2016-11: $178.76 per share

- 2016-12: $184.19 per share

- 2017-01: $193.96 per share

- 2017-02: $218.50 per share

- 2017-03: $200.24 per share

- 2017-04: $200.89 per share

- 2017-05: $195.81 per share

- 2017-06: $186.16 per share

- 2017-07: $206.11 per share

- 2017-08: $213.96 per share

- 2017-09: $226.44 per share

- 2017-10: $232.83 per share

- 2017-11: $241.67 per share

- 2017-12: $235.70 per share

- 2018-01: $237.54 per share

- 2018-02: $262.01 per share

- 2018-03: $257.76 per share

- 2018-04: $243.21 per share

- 2018-05: $221.07 per share

- 2018-06: $216.79 per share

- 2018-07: $233.05 per share

- 2018-08: $244.47 per share

- 2018-09: $256.08 per share

- 2018-10: $218.48 per share

- 2018-11: $215.50 per share

- 2018-12: $190.31 per share

- 2019-01: $206.45 per share

- 2019-02: $209.41 per share

- 2019-03: $207.20 per share

- 2019-04: $222.58 per share

- 2019-05: $205.12 per share

- 2019-06: $224.74 per share

- 2019-07: $228.30 per share

- 2019-08: $209.00 per share

- 2019-09: $211.79 per share

- 2019-10: $225.66 per share

- 2019-11: $251.67 per share

- 2019-12: $250.88 per share

- 2020-01: $261.00 per share

- 2020-02: $205.53 per share

- 2020-03: $182.21 per share

- 2020-04: $191.41 per share

- 2020-05: $199.89 per share

- 2020-06: $174.49 per share

- 2020-07: $173.71 per share

- 2020-08: $151.52 per share

- 2020-09: $140.75 per share

- 2020-10: $147.48 per share

- 2020-11: $160.19 per share

- 2020-12: $170.48 per share

- 2021-01: $157.33 per share

- 2021-02: $175.91 per share

- 2021-03: $205.85 per share

- 2021-04: $212.32 per share

- 2021-05: $216.21 per share

- 2021-06: $210.75 per share

- 2021-07: $205.13 per share

- 2021-08: $204.17 per share

- 2021-09: $193.06 per share

- 2021-10: $202.73 per share

- 2021-11: $177.51 per share

- 2021-12: $186.74 per share

- 2022-01: $187.20 per share

- 2022-02: $204.40 per share

- 2022-03: $199.44 per share

- 2022-04: $212.74 per share

- 2022-05: $210.46 per share

- 2022-06: $217.82 per share

- 2022-07: $216.84 per share

- 2022-08: $230.26 per share

- 2022-09: $221.50 per share

- 2022-10: $257.07 per share

- 2022-11: $231.96 per share

- 2022-12: $230.68 per share

- 2023-01: $220.54 per share

- 2023-02: $215.20 per share

- 2023-03: $207.02 per share

- 2023-04: $201.66 per share

- 2023-05: $201.38 per share

- 2023-06: $227.60 per share

- 2023-07: $229.67 per share

- 2023-08: $220.32 per share

- 2023-09: $204.58 per share

- 2023-10: $219.82 per share

- 2023-11: $237.02 per share

- 2023-12: $259.64 per share

- 2024-01: $258.92 per share

- 2024-02: $291.62 per share

- 2024-03: $291.47 per share

- 2024-04: $276.93 per share

- 2024-05: $253.10 per share

- 2024-06: $246.33 per share

- 2024-07: $279.98 per share

- 2024-08: $282.77 per share

- 2024-09: $264.38 per share

- 2024-10: $184.96 per share

- 2024-11: $197.92 per share

- 2024-12: $188.97 per share

- 2025-01: $197.26 per share

- 2025-02: $175.58 per share

- 2025-03: $204.04 per share

- 2025-04: $230.34 per share

- 2025-05: $223.06 per share

- 2025-06: $241.46 per share

- 2025-07: $278.86 per share

- 2025-08: $270.79 per share

- 2025-09: $287.91 per share

- 2025-10: $322.02 per share

- 2025-11: $313.62 per share

- 2025-12: $340.07 per share

- 2026-01: $420.51 per share

- 2026-02: $444.52 per share

- 2026-03: $379.90 per share

- 2026-04: $364.29 per share

- 2026-05: $308.17 per share

- 2026-06: $279.89 per share

- 2026-07: $326.45 per share

- 2026-08: $291.20 per share

- 2026-09: $267.07 per share

- 2026-10: $267.22 per share

## Annual estimated value (USD per share)

- FY2016: low $98.60 per share, central $110.51 per share, high $126.36 per share

- FY2017: low $108.60 per share, central $121.91 per share, high $139.63 per share

- FY2018: low $119.17 per share, central $135.36 per share, high $156.91 per share

- FY2019: low $150.25 per share, central $190.98 per share, high $223.08 per share

- FY2020: low $201.12 per share, central $253.56 per share, high $294.85 per share

- FY2021: low $170.31 per share, central $207.76 per share, high $240.53 per share

- FY2022: low $201.55 per share, central $251.14 per share, high $292.10 per share

- FY2023: low $219.08 per share, central $278.16 per share, high $324.14 per share

- FY2024: low $210.97 per share, central $237.95 per share, high $273.88 per share

- FY2025: low $211.66 per share, central $239.01 per share, high $275.41 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1501585/000150158526000006/hii-20251231.htm); period 2025-12-31, filed 2026-02-05.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.