Financial Review: Lockheed Martin Corporation (LMT) vs. Huntington Ingalls Industries (HII)

Lockheed Martin Corporation (NYSE: LMT) and Huntington Ingalls Industries (NYSE:HII) are both large-cap aerospace companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Insider & Institutional Ownership

79.3% of Lockheed Martin Corporation shares are held by institutional investors. Comparatively, 84.7% of Huntington Ingalls Industries shares are held by institutional investors. 0.4% of Lockheed Martin Corporation shares are held by company insiders. Comparatively, 2.2% of Huntington Ingalls Industries shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Lockheed Martin Corporation and Huntington Ingalls Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lockheed Martin Corporation 0 5 9 0 2.64
Huntington Ingalls Industries 2 3 2 0 2.00

Lockheed Martin Corporation currently has a consensus price target of $319.77, indicating a potential upside of 1.92%. Huntington Ingalls Industries has a consensus price target of $212.67, indicating a potential downside of 10.47%. Given Lockheed Martin Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Lockheed Martin Corporation is more favorable than Huntington Ingalls Industries.

Valuation and Earnings

This table compares Lockheed Martin Corporation and Huntington Ingalls Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Lockheed Martin Corporation $47.25 billion 1.90 $5.30 billion $12.43 25.24
Huntington Ingalls Industries $7.07 billion 1.52 $573.00 million $13.24 17.94

Lockheed Martin Corporation has higher revenue and earnings than Huntington Ingalls Industries. Huntington Ingalls Industries is trading at a lower price-to-earnings ratio than Lockheed Martin Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lockheed Martin Corporation and Huntington Ingalls Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lockheed Martin Corporation 7.31% 221.41% 7.65%
Huntington Ingalls Industries 8.31% 33.37% 8.90%

Risk and Volatility

Lockheed Martin Corporation has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Huntington Ingalls Industries has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Dividends

Lockheed Martin Corporation pays an annual dividend of $7.28 per share and has a dividend yield of 2.3%. Huntington Ingalls Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.0%. Lockheed Martin Corporation pays out 58.6% of its earnings in the form of a dividend. Huntington Ingalls Industries pays out 18.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lockheed Martin Corporation has increased its dividend for 4 consecutive years and Huntington Ingalls Industries has increased its dividend for 14 consecutive years.

Summary

Lockheed Martin Corporation beats Huntington Ingalls Industries on 9 of the 17 factors compared between the two stocks.

Lockheed Martin Corporation Company Profile

Lockheed Martin Corporation is a security and aerospace company. The Company operates through four segments. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Missiles and Fire Control segment provides air and missile defense systems; fire control systems; manned and unmanned ground vehicles, and energy management solutions. Rotary and Mission Systems segment provides design, manufacture, service and support for a range of military and civil helicopters; mission systems and sensors for rotary and fixed-wing aircraft; simulation and training services, and unmanned systems and technologies, among others. Space Systems segment is engaged in the research and development, design, engineering and production of satellites, strategic and defensive missile systems and space transportation systems.

Huntington Ingalls Industries Company Profile

Huntington Ingalls Industries, Inc. is a military shipbuilding company and a provider of professional services to partners in government and industry. The Company’s business consists of the design, construction, repair and maintenance of nuclear-powered ships and non-nuclear ships for the United States Navy and coastal defense surface ships for the United States Coast Guard, as well as the refueling and overhaul and inactivation of nuclear-powered ships for the United States Navy. It operates through three segments: Ingalls Shipbuilding (Ingalls), Newport News Shipbuilding (Newport News) and Technical Solutions. Its Ingalls segment includes its non-nuclear ship design, construction, repair and maintenance businesses. Its Newport News includes all of its nuclear ship design, construction, overhaul, refueling, and repair and maintenance businesses. Its Technical Solutions segment provides a range of professional services to the governmental, energy, and oil and gas markets.

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