Assessing the Sustainability and Growth of Huntington Ingalls Industries Inc's Dividends
Huntington Ingalls Industries Inc (HII, Financial) recently announced a dividend of $1.3 per share, payable on 2023-12-08, with the ex-dividend date set for 2023-11-22. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Huntington Ingalls Industries Inc's dividend performance and assess its sustainability.
What Does Huntington Ingalls Industries Inc Do?
Huntington Ingalls Industries is the largest independent military shipbuilder in the U.S., spun off of Northrop Grumman in 2011. It operates three segments, two of which are historied shipyards: Ingalls produces non-nuclear-powered ships including amphibious landing ships and Arleigh Burke-class destroyers while Newport News produces nuclear-powered ships as the only producer of Gerald Ford-class aircraft carriers and a major subcontractor on Virginia and Columbia-class nuclear submarines. Huntington Ingalls shares production of destroyers and nuclear submarines with General Dynamics' Bath Iron Works and Electric Boat shipyards, respectively. The company's Mission Technologies segment produces uncrewed sea vessels and provides a range of IT and other services to U.S. government agencies.
A Glimpse at Huntington Ingalls Industries Inc's Dividend History
Huntington Ingalls Industries Inc has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a quarterly basis. Huntington Ingalls Industries Inc has increased its dividend each year since 2012. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 11 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Huntington Ingalls Industries Inc's Dividend Yield and Growth
As of today, Huntington Ingalls Industries Inc currently has a 12-month trailing dividend yield of 2.09% and a 12-month forward dividend yield of 2.19%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Huntington Ingalls Industries Inc's annual dividend growth rate was 9.80%. Extended to a five-year horizon, this rate increased to 14.10% per year. And over the past decade, Huntington Ingalls Industries Inc's annual dividends per share growth rate stands at an impressive 36.70%. Based on Huntington Ingalls Industries Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Huntington Ingalls Industries Inc stock as of today is approximately 4.04%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Huntington Ingalls Industries Inc's dividend payout ratio is 0.37.
Huntington Ingalls Industries Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Huntington Ingalls Industries Inc's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Huntington Ingalls Industries Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Huntington Ingalls Industries Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Huntington Ingalls Industries Inc's revenue has increased by approximately 7.40% per year on average, a rate that outperforms approximately 66.17% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Huntington Ingalls Industries Inc's earnings increased by approximately 0.20% per year on average, a rate that outperforms approximately 43.18% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.70%, which outperforms approximately 34.65% of global competitors, indicates a steady trajectory of growth.
Concluding Thoughts on Huntington Ingalls Industries Inc's Dividend Profile
In conclusion, Huntington Ingalls Industries Inc's commitment to increasing dividends, coupled with a reasonable payout ratio and robust profitability, paints a promising picture for dividend investors. The company's solid growth metrics further support the sustainability of its dividend payments. As value investors consider their portfolio composition, Huntington Ingalls Industries Inc represents a potential candidate for those seeking steady dividend income and growth. Will Huntington Ingalls Industries Inc continue its trajectory of dividend growth, and how will it adapt to the evolving defense industry landscape? These are questions investors should ponder as they assess the company's long-term value proposition.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
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