Huntington Ingalls Industries HII, with rising earnings estimates, robust ROE, better debt management, a solid backlog and shareholder-friendly initiatives, offers a great investment opportunity in the Zacks Aerospace Defense industry.

Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock an attractive investment pick at the moment.

Growth Forecast & Surprise History of HII

The Zacks Consensus Estimate for HII’s 2025 earnings per share (EPS) has increased 3.3% to $14.31 per share over the past 30 days.

The Zacks Consensus Estimate for HII’s total revenues for 2025 stands at $11.91 billion, indicating year-over-year growth of 3.3%.

The company’s (three to five years) earnings growth rate is pegged at 11%. HII surpassed expectations in the last four reported quarters and delivered an average earnings surprise of 4.20% in the last four quarters.

HII’s Return on Equity

Return on equity (ROE) measures how effectively a company has used its funds to generate higher returns. HII currently has an ROE of 12.26% compared to the industry's average of 10.75%. This suggests that the company has been utilizing its funds more effectively than its peers in the industry.

HII’s Shareholder-Friendly Initiatives

Huntington Ingalls has been increasing shareholders’ value through dividend payments. Currently, the company’s quarterly dividend is $1.35 per share, resulting in an annualized dividend of $5.40. During the first quarter of 2025, the company paid dividends worth $53 million. The company’s current dividend yield is 2.40%, better than the Zacks S&P 500 Composite's average of 1.27%.

HII’s Rising Backlog

With the strong demand that Huntington Ingalls products enjoy, the company’s order growth remains solid. The value of the company’s new contract awards won in the first quarter of 2025 was nearly $2.1 billion. This resulted in a total backlog of $48.05 billion as of March 31, 2025. Such a significant backlog count bodes well for the company's revenue generation prospects in the coming years.

Overview of HII’s Debt Profile

Currently, Huntington Ingalls’ total debt to capital is 40.15%, better than the industry’s average of 52.09%.

HII’s times interest earned ratio (TIE) at the end of the first quarter of 2025 was 7.3. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

HII Stock Price Performance

In the past three months, HII shares have risen 28% compared with the industry’s growth of 8%.

Image Source: Zacks Investment Research