Financial Analysis: Triumph Group (TGI) versus Huntington Ingalls Industries (HII)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Triumph Group -1.89% 28.96% 5.74%
Huntington Ingalls Industries 7.93% 31.12% 8.28%

Analyst Ratings

This is a summary of recent ratings for Triumph Group and Huntington Ingalls Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Triumph Group 3 6 3 0 2.00
Huntington Ingalls Industries 2 4 2 0 2.00

Triumph Group presently has a consensus price target of $30.00, indicating a potential downside of 4.46%. Huntington Ingalls Industries has a consensus price target of $202.17, indicating a potential downside of 13.66%. Given Triumph Group’s higher probable upside, research analysts clearly believe Triumph Group is more favorable than Huntington Ingalls Industries.

Insider & Institutional Ownership

99.8% of Triumph Group shares are held by institutional investors. Comparatively, 85.5% of Huntington Ingalls Industries shares are held by institutional investors. 2.8% of Triumph Group 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 endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Triumph Group and Huntington Ingalls Industries’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Triumph Group $3.42 billion 0.46 $400.81 million ($1.32) -23.79
Huntington Ingalls Industries $7.19 billion 1.48 $1.03 billion $12.24 19.13

Huntington Ingalls Industries has higher revenue and earnings than Triumph Group. Triumph Group 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.

Risk & Volatility

Triumph Group has a beta of 1.68, indicating that its stock price is 68% 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.

Dividends

Triumph Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Huntington Ingalls Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.0%. Triumph Group pays out -12.1% 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. Triumph Group has raised its dividend for 4 consecutive years.

Summary

Huntington Ingalls Industries beats Triumph Group on 8 of the 15 factors compared between the two stocks.

Triumph Group Company Profile

Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls and distributes a portfolio of aircraft components, accessories, subassemblies and systems. The Company offers a range of products and services to the aerospace industry through three segments: Triumph Aerostructures Group, whose companies are engaged in the design, manufacture, assembly and integration of metallic and composite aerostructures and structural components for the aerospace original equipment manufacturer (OEM) market; Triumph Aerospace Systems Group, whose companies design, engineer and manufacture a range of build-to-print components, assemblies and systems also for the OEM market, and Triumph Aftermarket Services Group, whose companies serve aircraft fleets, such as commercial airlines, the United States military and cargo carriers, through the maintenance, repair and overhaul (MRO) of aircraft components and accessories manufactured by third parties.

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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