Head to Head Review: Huntington Ingalls Industries (HII) versus American Science & Engineering (ASEI)

American Science & Engineering (NASDAQ: ASEI) and Huntington Ingalls Industries (NYSE:HII) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Valuation and Earnings

This table compares American Science & Engineering and Huntington Ingalls Industries’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Science & Engineering N/A N/A N/A ($0.37) -100.13
Huntington Ingalls Industries $7.19 billion 1.49 $1.03 billion $12.24 19.27

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

Analyst Recommendations

This is a summary of recent ratings and price targets for American Science & Engineering and Huntington Ingalls Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Science & Engineering 0 0 0 0 N/A
Huntington Ingalls Industries 2 4 2 0 2.00

Huntington Ingalls Industries has a consensus target price of $206.83, suggesting a potential downside of 12.30%. Given Huntington Ingalls Industries’ higher probable upside, analysts plainly believe Huntington Ingalls Industries is more favorable than American Science & Engineering.

Dividends

American Science & Engineering pays an annual dividend of $2.00 per share and has a dividend yield of 5.4%. Huntington Ingalls Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.0%. American Science & Engineering pays out -540.5% of its earnings in the form of a dividend. Huntington Ingalls Industries pays out 19.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. American Science & Engineering has raised its dividend for 4 consecutive years. American Science & Engineering is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

American Science & Engineering has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, Huntington Ingalls Industries has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Institutional and Insider Ownership

72.9% of American Science & Engineering shares are held by institutional investors. Comparatively, 85.5% of Huntington Ingalls Industries shares are held by institutional investors. 2.4% of American Science & Engineering shares are held by company insiders. Comparatively, 2.2% of Huntington Ingalls Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares American Science & Engineering and Huntington Ingalls Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Science & Engineering 0.19% 0.15% 0.13%
Huntington Ingalls Industries 7.93% 31.12% 8.28%

Summary

Huntington Ingalls Industries beats American Science & Engineering on 8 of the 13 factors compared between the two stocks.

American Science & Engineering Company Profile

American Science and Engineering, Inc. (AS&E) is engaged in developing, manufacturing, marketing and selling X-ray inspection and other detection products. The Company manufactures X-ray inspection products that can be used to inspect parcels, baggage, vehicles, pallets, cargo containers and people. The Company offers its products for homeland security, force protection, public safety and other critical defense and security applications. The Company’s products and services are grouped into approximately five areas: cargo inspection systems, which include OmniView Gantry System, Z Portal System, Sentry Portal System, CarView System and ASE Connect; mobile cargo inspection systems, which include Z Backscatter Van; parcel and personnel screening inspection systems, which include Gemini System, SmartCheck System and MINI Z System; custom products, and service and 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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