Huntington Ingalls Industries (NYSE: HII) and American Science & Engineering (NASDAQ:ASEI) are both aerospace companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Volatility & Risk

Huntington Ingalls Industries has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, American Science & Engineering has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Profitability

This table compares Huntington Ingalls Industries and American Science & Engineering’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Huntington Ingalls Industries 7.93% 31.12% 8.28%
American Science & Engineering 0.19% 0.15% 0.13%

Analyst Ratings

This is a breakdown of current ratings for Huntington Ingalls Industries and American Science & Engineering, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Huntington Ingalls Industries 2 4 2 0 2.00
American Science & Engineering 0 0 0 0 N/A

Huntington Ingalls Industries presently has a consensus price target of $206.83, indicating a potential downside of 11.94%. Given Huntington Ingalls Industries’ higher probable upside, equities analysts plainly believe Huntington Ingalls Industries is more favorable than American Science & Engineering.

Institutional & Insider Ownership

85.5% of Huntington Ingalls Industries shares are owned by institutional investors. Comparatively, 72.9% of American Science & Engineering shares are owned by institutional investors. 2.2% of Huntington Ingalls Industries shares are owned by insiders. Comparatively, 2.4% of American Science & Engineering shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Huntington Ingalls Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.0%. American Science & Engineering pays an annual dividend of $2.00 per share and has a dividend yield of 5.4%. Huntington Ingalls Industries pays out 19.6% of its earnings in the form of a dividend. American Science & Engineering pays out -540.5% 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 increased its dividend for 4 consecutive years. American Science & Engineering is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Huntington Ingalls Industries and American Science & Engineering’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Huntington Ingalls Industries $7.19 billion 1.48 $1.03 billion $12.24 19.19
American Science & Engineering N/A N/A N/A ($0.37) -100.13

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

Summary

Huntington Ingalls Industries beats American Science & Engineering on 9 of the 13 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 American Science & Engineering

American Science and Engineering, Inc. (AS&E) is engaged in developing, manufacturing, marketing and selling X-ray inspection and other detection products. The Company manufactures X-ray inspection products that can be used to inspect parcels, baggage, vehicles, pallets, cargo containers and people. The Company offers its products for homeland security, force protection, public safety and other critical defense and security applications. The Company’s products and services are grouped into approximately five areas: cargo inspection systems, which include OmniView Gantry System, Z Portal System, Sentry Portal System, CarView System and ASE Connect; mobile cargo inspection systems, which include Z Backscatter Van; parcel and personnel screening inspection systems, which include Gemini System, SmartCheck System and MINI Z System; custom products, and service and support.

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