Huntington Ingalls Industries (NYSE:HII) and Honeywell International (NYSE:HON) are both aerospace companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.
Earnings and Valuation
This table compares Huntington Ingalls Industries and Honeywell International's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Huntington Ingalls Industries | $8.90 billion | 0.94 | $549 million | $14.01 | 14.77 |
| Honeywell International | $36.71 billion | 4.30 | $6.14 billion | $8.16 | 27.82 |
Honeywell International has higher revenue and earnings than Huntington Ingalls Industries. Huntington Ingalls Industries is trading at a lower price-to-earnings ratio than Honeywell International, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Huntington Ingalls Industries and Honeywell International, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Huntington Ingalls Industries | 0 | 8 | 3 | 0 | 2.27 |
| Honeywell International | 0 | 7 | 9 | 0 | 2.56 |
Huntington Ingalls Industries presently has a consensus target price of $194.90, indicating a potential downside of 5.79%. Honeywell International has a consensus target price of $213.1429, indicating a potential downside of 6.10%. Given Huntington Ingalls Industries' higher possible upside, analysts plainly believe Huntington Ingalls Industries is more favorable than Honeywell International.
Profitability
This table compares Huntington Ingalls Industries and Honeywell International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Huntington Ingalls Industries | 6.61% | 36.94% | 8.01% |
| Honeywell International | 14.99% | 27.69% | 8.34% |
Risk & Volatility
Huntington Ingalls Industries has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Honeywell International has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.
Insider and Institutional Ownership
82.4% of Huntington Ingalls Industries shares are held by institutional investors. Comparatively, 76.0% of Honeywell International shares are held by institutional investors. 2.8% of Huntington Ingalls Industries shares are held by company insiders. Comparatively, 0.6% of Honeywell International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Dividends
Huntington Ingalls Industries pays an annual dividend of $4.56 per share and has a dividend yield of 2.2%. Honeywell International pays an annual dividend of $3.72 per share and has a dividend yield of 1.6%. Huntington Ingalls Industries pays out 32.5% of its earnings in the form of a dividend. Honeywell International pays out 45.6% 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. Huntington Ingalls Industries has raised its dividend for 8 consecutive years and Honeywell International has raised its dividend for 10 consecutive years. Huntington Ingalls Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Honeywell International beats Huntington Ingalls Industries on 10 of the 17 factors compared between the two stocks.
