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HII vs. RTX: Which Stock Should Value Investors Buy Now?

By Zacks Equity Research | July 31, 2025, 11:40 AM

Investors with an interest in Aerospace - Defense stocks have likely encountered both Huntington Ingalls (HII) and RTX (RTX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Huntington Ingalls has a Zacks Rank of #2 (Buy), while RTX has a Zacks Rank of #3 (Hold) right now. This means that HII's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

HII currently has a forward P/E ratio of 17.92, while RTX has a forward P/E of 26.57. We also note that HII has a PEG ratio of 1.59. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RTX currently has a PEG ratio of 2.91.

Another notable valuation metric for HII is its P/B ratio of 2.13. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, RTX has a P/B of 3.3.

Based on these metrics and many more, HII holds a Value grade of B, while RTX has a Value grade of C.

HII stands above RTX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HII is the superior value option right now.

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Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report
 
RTX Corporation (RTX): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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