Huntington Ingalls Industries: High Customer Demand, But Valuation Is High

Dividend Power5.96K FollowersFollow5ShareSavePlay(22min)CommentsSummaryHuntington Ingalls Industries is the largest U.S. naval shipbuilder, benefiting from surging naval budgets and a $55B backlog.HII has improved operations, throughput, and margins, but the stock trades at ~23.9x 2026 EPS, well above historical averages.Dividend safety remains solid with a 13-year growth streak, but the current yield is near all-time lows, and FCF for 2026 is forecast to be lower.I rate HII as a 'hold' due to overvaluation and downside risk outweighing upside, despite strong industry positioning and demand tailwinds. EyeEm Mobile GmbH/iStock via Getty Images Huntington Ingalls Industries, Inc. (HII) share price has gained nearly 113% in the past year. The stock was an outstanding one for those who bought it in early 2025. The firm has improved operations andThis article was written byDividend Power5.96K FollowersFollowI am a self-taught individual investor and I have been investing in stocks for over 25 years. I focus on dividend growth investing with a long-term horizon since I believe in the compounding power of dividend growth investing. I generally look for undervalued large cap stocks with sustainable dividend growth and capital appreciation potential. My second focus is tech and small- or mid-cap stocks with or without dividends for their growth potential. I try to provide a little more in depth analysis weighing the positives and negatives. I am now in the Top 2.0% out of 28,000+ financial bloggers (December 2023) as tracked by Tip Ranks for my SA articles.Work/ associated with the existing authors James Marino and Ferdis.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.