2. Huntington Ingalls Industries (NYSE: HII)
Industry: Defence and shipbuilding
Market cap: US$10.4 billion6
P/E ratio: 20.047
Huntington Ingalls Industries is the US’s largest military shipbuilder and a premier provider of defence technologies. The company operates through three main segments: Ingalls Shipbuilding, Newport News Shipbuilding and Mission Technologies.
Newport News Shipbuilding is the sole designer, builder and refueler of US Navy aircraft carriers and one of only two companies capable of designing and building nuclear-powered submarines.
Ingalls Shipbuilding builds non-nuclear ships, including guided missile destroyers, amphibious assault ships and Coast Guard cutters.
The Mission Technologies segment provides a wide range of professional services, including fleet sustainment, logistics, engineering and digital solutions to government and commercial customers.
Analysts consider it a top pick among undervalued defence stocks. The company benefits from a substantial backlog of US government contracts, providing revenue visibility for years ahead. And, as geopolitical tensions rise globally, defence spending is likely to increase, particularly in naval capabilities, where HII dominates.
Highlights:
Q2 FY25 revenue was up US$3.1 billion, while net earnings were US$152 million8
The company has new contract awards worth US$11.9 billion, which resulted in a record backlog of US$56.9 billion9