Exelis (NYSE: XLS) and Huntington Ingalls Industries (NYSE:HII) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Dividends

Huntington Ingalls Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.2%. Exelis does not pay a dividend. Huntington Ingalls Industries pays out 19.6% of its earnings in the form of a dividend. Exelis has raised its dividend for 4 consecutive years.

Insider and Institutional Ownership

85.5% of Huntington Ingalls Industries shares are owned by institutional investors. 2.2% of Huntington Ingalls Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Exelis 7.52% 18.51% 4.87%
Huntington Ingalls Industries 7.93% 31.12% 8.28%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Exelis and Huntington Ingalls Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exelis 0 0 0 0 N/A
Huntington Ingalls Industries 2 4 2 0 2.00

Huntington Ingalls Industries has a consensus price target of $202.17, suggesting a potential downside of 1.92%. Given Huntington Ingalls Industries’ higher possible upside, analysts plainly believe Huntington Ingalls Industries is more favorable than Exelis.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Exelis N/A N/A N/A N/A N/A
Huntington Ingalls Industries $7.19 billion 1.30 $1.03 billion $12.24 16.84

Huntington Ingalls Industries has higher revenue and earnings than Exelis.

Summary

Huntington Ingalls Industries beats Exelis on 9 of the 11 factors compared between the two stocks.

Exelis Company Profile

Exelis Inc. (Exelis) is a diversified aerospace, defense, information and services company. The Company delivers mission-critical solutions to military, government and commercial customers in the United States and globally. It operates in two segments: Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) Electronics and Systems, and Information and Technical Services. Its C4ISR Electronics and Systems segment provides engineered systems and solutions, including: ISR systems; integrated electronic warfare systems; radar and sonar systems; electronic attack and release systems; communications solutions; space systems, and composite aerostructures. The Company’s Information and Technical Services segment provides a range of service solutions: systems integration; network design and development; air traffic management; cyber; intelligence; advanced engineering, and space launch and range-support.

Huntington Ingalls Industries Company Profile

Huntington Ingalls Industries, Inc. is a military shipbuilding company and a provider of professional services to partners in government and industry. The Company’s business consists of the design, construction, repair and maintenance of nuclear-powered ships and non-nuclear ships for the United States Navy and coastal defense surface ships for the United States Coast Guard, as well as the refueling and overhaul and inactivation of nuclear-powered ships for the United States Navy. It operates through three segments: Ingalls Shipbuilding (Ingalls), Newport News Shipbuilding (Newport News) and Technical Solutions. Its Ingalls segment includes its non-nuclear ship design, construction, repair and maintenance businesses. Its Newport News includes all of its nuclear ship design, construction, overhaul, refueling, and repair and maintenance businesses. Its Technical Solutions segment provides a range of professional services to the governmental, energy, and oil and gas markets.

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