Reviewing Ducommun (NYSE:DCO) & Huntington Ingalls Industries (HII)

Ducommun (NYSE: DCO) and Huntington Ingalls Industries (NYSE:HII) are both aerospace companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Valuation and Earnings

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This table compares Ducommun and Huntington Ingalls Industries’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ducommun $558.18 million 0.62 $20.07 million $1.33 22.93
Huntington Ingalls Industries $7.44 billion 1.55 $479.00 million $12.14 21.19

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

Volatility & Risk

Ducommun has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Huntington Ingalls Industries has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Institutional and Insider Ownership

82.5% of Ducommun shares are held by institutional investors. Comparatively, 84.2% of Huntington Ingalls Industries shares are held by institutional investors. 8.2% of Ducommun shares are held by insiders. Comparatively, 2.2% of Huntington Ingalls Industries shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Ducommun and Huntington Ingalls Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ducommun 3.60% 6.82% 2.75%
Huntington Ingalls Industries 6.44% 31.01% 8.39%

Analyst Recommendations

This is a summary of current recommendations and price targets for Ducommun and Huntington Ingalls Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ducommun 0 1 3 0 2.75
Huntington Ingalls Industries 1 2 5 0 2.50

Ducommun presently has a consensus price target of $37.00, indicating a potential upside of 21.31%. Huntington Ingalls Industries has a consensus price target of $266.75, indicating a potential upside of 3.71%. Given Ducommun’s stronger consensus rating and higher probable upside, analysts clearly believe Ducommun is more favorable than Huntington Ingalls Industries.

Dividends

Huntington Ingalls Industries pays an annual dividend of $2.88 per share and has a dividend yield of 1.1%. Ducommun does not pay a dividend. Huntington Ingalls Industries pays out 23.7% of its earnings in the form of a dividend. Huntington Ingalls Industries has increased its dividend for 5 consecutive years.

Summary

Huntington Ingalls Industries beats Ducommun on 12 of the 17 factors compared between the two stocks.

About Ducommun

Ducommun Incorporated is a global provider of engineering and manufacturing services for various products and failure applications used primarily in the aerospace, defense, industrial, natural resources, medical and other industries. The Company is a solution-based provider, offering a range of value-added products and services in its primary businesses of electronics, structures and integrated solutions. The Company operates through two segments: Electronic Systems (ES) and Structural Systems (SS). The ES has over three product offerings in electronics manufacturing for various applications, including complex cable assemblies and interconnect systems, printed circuit board assemblies, and electronic, electromechanical and mechanical assemblies. The SS segment offers over three product offerings to support a customer base, including commercial aircraft, military fixed-wing aircraft, and military and commercial rotary-wing aircraft.

About Huntington Ingalls Industries

Huntington Ingalls Industries, Inc. engages in the designing, building, overhauling, and repairing military ships in the United States. It operates through three segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Technical Solutions. The company is involved in the design and construction of non-nuclear ships comprising amphibious assault ships that include deck amphibious ships and transport dock ships; surface combatants; and national security cutters for the U.S. Navy and U.S. Coast Guard. It also provides nuclear-powered ships, such as aircraft carriers and submarines, as well as refueling and overhaul, and inactivation services. In addition, the company offers naval nuclear support services, including fleet services comprising design, construction, maintenance, and disposal activities for in service U.S. Navy nuclear ships; and maintenance services on nuclear reactor prototypes. Further, it provides fleet support services comprising ship technical and waterfront; naval architecture and marine engineering; integrated logistics support; technical documentation development; warehousing, asset management, and material readiness; operational and maintenance training development and delivery; software design and development; IT infrastructure support, and data delivery and management; and cyber security and information assurance services, as well as undersea vehicle and specialized craft development and prototyping services. Additionally, the company offers integrated missions solutions services; nuclear and environmental services; engineering, procurement, and construction management services to the oil and gas industry; nuclear management and operations, and environmental management services to the Department of Energy, Department of Defense, local governments, and the private sector; and unmanned underwater vehicles designing and building services. Huntington Ingalls Industries, Inc. was founded in 1886 and is headquartered in Newport News, Virginia.

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