Huntington Ingalls 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, overhaul and inactivation services of ships.
In addition, the company offers naval nuclear support services, including fleet services comprising design, construction, maintenance and disposal activities for in-service of U.S. Navy nuclear ships, as well as maintenance services on nuclear reactor prototypes.
Huntington Ingalls also provides life-cycle sustainment services to the U.S. Navy fleet and other maritime customers; high-end information technology and mission-based solutions for U.S. Department of Defense, intelligence and federal civilian customers; nuclear management and operations and environmental management services for the Department of Energy, Defense Department, state and local governments, and private sector companies; defense and federal solutions; and unmanned systems.
Shareholders receive a 2.05% dividend. Cowen’s $270 target price is above the $247.56 consensus target for Huntington Ingalls Industries stock. Thursday’s close was at $223.33 a share.
Lockheed Martin
This is another top aerospace and defense stock to buy, and it still offers investors looking to buy shares a solid entry point. Lockheed Martin Corp. (NYSE: LMT) researches, designs, develops, manufactures, integrates, operates and sustains advanced technology systems, products and services. It also provides a wide range of defense electronics products and IT services.
Being the Pentagon’s prime contractor, Lockheed Martin offers a diverse portfolio of global aerospace, defense, security and advanced technologies. Its leveraged presence in the Army, Air Force, Navy and IT programs guarantees a steady inflow of follow-on orders, not only from the U.S. government but also from many foreign allies of the nation.
Over the past several years, Lockheed Martin’s backlog has substantially outgrown the rest of the industry, supporting the growth outlook for the foreseeable future. The company has exposure to Defense Department priority buckets and consistently executes well. Even if the end market growth rate slows, continued strong fundamentals can be expected, with compounding earnings and cash flows.
The dividend yield here is 2.71%. The $522 Morgan Stanley price objective compares with a consensus target of $459.79. Lockheed Martin stock closed on Thursday at $389.79.
L3 Harris Technologies
After its 2019 merger, this became the sixth-largest defense company. L3 Harris Technologies Inc. (NYSE: LHX) is an agile global aerospace and defense technology innovator engaged in the provision of defense and commercial technologies across air, land, sea, space and cyber domains.
Its Integrated Mission Systems segment includes intelligence, surveillance and reconnaissance; advanced electro optical and infrared; and maritime power and navigation. The Space and Airborne Systems segment comprises space payloads, sensors and full-mission solutions; classified intelligence and cyber defense; avionics; and electronic warfare.
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