Huntington Ingalls Industries, Inc. (HII) Stock Analysis

Huntington Ingalls Industries (HII) possesses several durable competitive advantages rooted in its scale, technical expertise, and entrenched customer relationships. Most notably, HII is the sole builder of U.S. Navy nuclear-powered aircraft carriers and one of only two U.S. firms (alongside General Dynamics’ Electric Boat) capable of constructing nuclear submarines.¹ This exclusivity creates high barriers to entry: new entrants would require multi-billion-dollar investments, decades of technical development, and government security clearances.²

HII’s backlog—approximately $48–49 billion as of late 2024—provides multi-year revenue visibility unmatched by most industrial peers.³ Its Newport News and Ingalls divisions together account for roughly 75% of U.S. Navy shipbuilding by value, while Mission Technologies diversifies revenue into higher-margin, technology-driven services.⁴

Customer concentration is a double-edged sword: over 80% of revenue comes from the U.S. Navy and Department of Defense, ensuring stability but exposing HII to budgetary risk.⁵ However, switching costs are extremely high; the Navy’s reliance on HII’s unique infrastructure and skilled workforce (44,000 employees) makes substitution impractical.⁶

Compared to General Dynamics, HII’s edge lies in aircraft carriers and amphibious ships⁷, while GD leads in submarines⁸. Other rivals—such as Fincantieri and Austal—lack the scale, nuclear credentials, and long-term customer integration that underpin HII’s moat⁹. HII’s culture of technical excellence and safety further supports its reputation for reliable execution on complex, mission-critical programs¹⁰.