Huntington Ingalls Industries (NYSE: HII) and AeroVironment (NASDAQ:AVAV) are both aerospace companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitabiliy.

Insider and Institutional Ownership

86.4% of Huntington Ingalls Industries shares are owned by institutional investors. Comparatively, 81.7% of AeroVironment shares are owned by institutional investors. 2.2% of Huntington Ingalls Industries shares are owned by company insiders. Comparatively, 12.5% of AeroVironment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Huntington Ingalls Industries and AeroVironment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Huntington Ingalls Industries 2 4 2 0 2.00
AeroVironment 0 6 0 0 2.00

Huntington Ingalls Industries presently has a consensus target price of $195.17, suggesting a potential downside of 1.12%. AeroVironment has a consensus target price of $29.25, suggesting a potential downside of 23.93%. Given Huntington Ingalls Industries’ higher possible upside, equities research analysts clearly believe Huntington Ingalls Industries is more favorable than AeroVironment.

Earnings & Valuation

This table compares Huntington Ingalls Industries and AeroVironment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Huntington Ingalls Industries $7.03 billion 1.29 $1.01 billion $11.83 16.68
AeroVironment $264.87 million 3.38 $21.85 million $0.52 73.94

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

Volatility & Risk

Huntington Ingalls Industries has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, AeroVironment has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Dividends

Huntington Ingalls Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.2%. AeroVironment does not pay a dividend. Huntington Ingalls Industries pays out 20.3% of its earnings in the form of a dividend. Huntington Ingalls Industries has increased its dividend for 4 consecutive years.

Profitability

This table compares Huntington Ingalls Industries and AeroVironment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Huntington Ingalls Industries 7.91% 29.05% 7.79%
AeroVironment 4.71% 3.49% 3.12%

Summary

Huntington Ingalls Industries beats AeroVironment on 11 of the 16 factors compared between the two stocks.

About Huntington Ingalls Industries

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.

About AeroVironment

AeroVironment, Inc. designs, develops, produces, supports and operates a portfolio of products and services for government agencies, businesses and consumers. The Company operates through two segments: Unmanned Aircraft Systems (UAS), which focuses primarily on the design, development, production, support and operation of UAS and tactical missile systems that provide situational awareness, multi-band communications, force protection and other mission effects, and Efficient Energy Systems (EES), which focuses primarily on the design, development, production, marketing, support and operation of electric energy systems. The Company supplies UAS, tactical missile systems and related services primarily to organizations within the United States Department of Defense (DoD). The Company also supplies charging systems and services for electric vehicles (EVs), and power cycling and test systems to commercial, consumer and government customers.

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