Huntington Ingalls Industries (NYSE:HII) versus Park Aerospace (NYSE:PKE) Financial Analysis

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

Earnings and Valuation

This table compares Park Aerospace and Huntington Ingalls Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Park Aerospace	$73.30 million	7.90	$11.27 million	$0.72	36.49
Huntington Ingalls Industries	$12.48 billion	0.86	$605.00 million	$16.78	16.20

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

Institutional & Insider Ownership

77.8% of Park Aerospace shares are owned by institutional investors. Comparatively, 90.5% of Huntington Ingalls Industries shares are owned by institutional investors. 7.1% of Park Aerospace shares are owned by company insiders. Comparatively, 0.8% 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 company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Park Aerospace and Huntington Ingalls Industries, as reported by MarketBeat.

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

Park Aerospace currently has a consensus price target of $42.50, suggesting a potential upside of 61.74%. Huntington Ingalls Industries has a consensus price target of $361.75, suggesting a potential upside of 33.11%. Given Park Aerospace’s stronger consensus rating and higher probable upside, research analysts plainly believe Park Aerospace is more favorable than Huntington Ingalls Industries.

Volatility & Risk

Park Aerospace has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, Huntington Ingalls Industries has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Park Aerospace	18.42%	11.21%	10.25%
Huntington Ingalls Industries	5.01%	12.89%	5.26%

Dividends

Park Aerospace pays an annual dividend of $0.50 per share and has a dividend yield of 1.9%. Huntington Ingalls Industries pays an annual dividend of $5.52 per share and has a dividend yield of 2.0%. Park Aerospace pays out 69.4% of its earnings in the form of a dividend. Huntington Ingalls Industries pays out 32.9% 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. Huntington Ingalls Industries has increased its dividend for 13 consecutive years. Huntington Ingalls Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Huntington Ingalls Industries beats Park Aerospace on 9 of the 17 factors compared between the two stocks.

About Park Aerospace

Park Aerospace Corp., an aerospace company, develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the aerospace market in North America, Asia, and Europe. It offers advanced composite materials, including film adhesives and lightning strike protection materials that are used to produce primary and secondary structures for jet engines, large and regional transport aircrafts, military aircrafts, unmanned aerial vehicles, business jets, general aviation aircrafts, and rotary wing aircrafts. The company also provides specialty ablative materials for rocket motors and nozzles; and specially designed materials for radome applications. In addition, it designs and fabricates composite parts, structures and assemblies, and low volume tooling for the aerospace industry. The company was formerly known as Park Electrochemical Corp. and changed its name to Park Aerospace Corp. in July 2019. Park Aerospace Corp. was incorporated in 1954 and is based in Westbury, New York.

About Huntington Ingalls Industries

Huntington Ingalls Industries, Inc. designs, builds, overhauls, and repairs military ships in the United States. It operates through three segments: Ingalls, Newport News, and Mission Technologies. The company is involved in the design and construction of non-nuclear ships comprising amphibious assault ships; expeditionary warfare 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 of nuclear-powered aircraft carriers. In addition, the company offers naval nuclear support services, including fleet services comprising design, construction, maintenance, and disposal activities for in-service the U.S. Navy nuclear ships; and maintenance services on nuclear reactor prototypes. Further, the company provides C5ISR systems and operations; application of artificial intelligence and machine learning to battlefield decisions; defensive and offensive cyberspace strategies and electronic warfare; live, virtual, and constructive solutions; unmanned, autonomous systems; and fleet sustainment; and critical nuclear operations. Huntington Ingalls Industries, Inc. was founded in 1886 and is headquartered in Newport News, Virginia.