Assessing the Dividend Sustainability of Huntington Ingalls Industries Inc
Huntington Ingalls Industries Inc (HII, Financial) recently announced a dividend of $1.3 per share, payable on 2024-03-08, with the ex-dividend date set for 2024-02-22. 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 storied 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 12 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 1.74% and a 12-month forward dividend yield of 1.80%. 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 5.90%. Extended to a five-year horizon, this rate increased to 10.40% per year. And over the past decade, Huntington Ingalls Industries Inc's annual dividends per share growth rate stands at an impressive 22.70%.
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 2.85%.
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 2023-12-31, Huntington Ingalls Industries Inc's dividend payout ratio is 0.31.
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 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each 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 7.60% per year on average, a rate that outperforms approximately 62.88% 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 -0.30% per year on average, a rate that outperforms approximately 40.18% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -2.90%, which outperforms approximately 29.69% of global competitors.
Concluding Insights on Dividend Strength
Considering Huntington Ingalls Industries Inc's consistent dividend growth, reasonable payout ratio, strong profitability, and solid growth metrics, investors can be cautiously optimistic about the future of the company's dividend payments. These factors combined suggest that Huntington Ingalls Industries Inc is well-positioned to continue rewarding shareholders with dividends. However, as with any investment, it is essential to keep an eye on broader market trends and company-specific developments that could impact future payouts. Will Huntington Ingalls Industries Inc continue its impressive dividend track record? That remains a question for value investors to ponder as they consider the sustainability of the company's financial practices and growth prospects.
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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.
