★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
VOL. XCIV, NO. 247
Huntington Ingalls Industries, Inc.
HII · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Huntington Ingalls Industries (HII) is the largest U.S. naval shipbuilder, spanning nuclear shipbuilding at Newport News, non-nuclear surface shipbuilding at Ingalls, and defense technology/services through Mission Technologies. Newport News remains the strongest moat because HII is the only current builder/refueler/inactivator of U.S. Navy nuclear aircraft carriers and one of two nuclear-submarine builders. Ingalls benefits from sole/duopoly ship-class positions and HII had $54.0B of total backlog at March 31, 2026, but cost growth, appropriations timing, and the Newport News welding-procedure investigation are current risks. Mission Technologies is more competitive, with advantages tied to government relationships, clearances, and classified-program infrastructure rather than structural exclusivity.
Primary segment
Newport News Shipbuilding (Nuclear Shipbuilding)
Market structure
Quasi-Monopoly
Market share
—
HHI: —
Coverage
3 segments · 5 tags
Updated 2026-05-27
Segments
Newport News Shipbuilding (Nuclear Shipbuilding)
U.S. Navy nuclear shipbuilding and carrier lifecycle services (CVN construction/RCOH/inactivation + SSN/SSBN construction)
Revenue
53.1%
Structure
Quasi-Monopoly
Pricing
moderate
Share
—
Peers
Ingalls Shipbuilding (Non-Nuclear Shipbuilding)
U.S. Navy and U.S. Coast Guard non-nuclear shipbuilding (amphibious assault ships, surface combatants, cutters)
Revenue
23.1%
Structure
Quasi-Monopoly
Pricing
moderate
Share
—
Peers
Mission Technologies (Defense Tech & Services)
U.S. defense C5ISR, cyber/electronic warfare, autonomy, training (LVC), and fleet sustainment services
Revenue
23.8%
Structure
Competitive
Pricing
weak
Share
—
Peers
Moat Claims
Newport News Shipbuilding (Nuclear Shipbuilding)
U.S. Navy nuclear shipbuilding and carrier lifecycle services (CVN construction/RCOH/inactivation + SSN/SSBN construction)
Revenue/operating profit shares based on Q1 2026 segment sales and service revenues and segment operating income in the Form 10-Q. Newport News Q1 2026 revenue increased 19%, driven by aircraft carriers, submarines, and naval nuclear support services.
Contractual Exclusivity
Legal
Contractual Exclusivity
Strength
Durability
Confidence
Evidence
Sole builder for U.S. Navy nuclear aircraft carriers and exclusive prime contractor for carrier refueling/complex overhaul (RCOH), creating an effectively captive market for mid-life CVN overhauls and future inactivation work.
Erosion risks
- U.S. Government shipyards could be upgraded to perform CVN refueling/RCOH
- Defense budget reprioritization reduces CVN procurement or overhaul tempo
- Execution risk (schedule slips, rework, cost growth) damages award prospects
Leading indicators
- Navy RCOH award cadence and funding
- U.S. Navy shipbuilding plan (CVN force structure and procurement timing)
- RCOH cycle time / on-time redelivery performance
Counterarguments
- Single customer (U.S. Navy) has strong bargaining power and can shift work scope/pricing through contract terms
- Government periodically evaluates moving CVN refueling to public yards
Capex Knowhow Scale
Supply
Capex Knowhow Scale
Strength
Durability
Confidence
Evidence
Capital-intensive nuclear shipyard plus trained workforce and accumulated nuclear expertise raise barriers to entry and replication risk for competitors or public yards.
Erosion risks
- Workforce shortages and skill dilution (welding, nuclear-qualified trades)
- Supply chain constraints for nuclear-grade components
- Inflation and contract cost growth that is not fully recoverable
Leading indicators
- Hiring/attrition and apprenticeship throughput
- Virginia/Columbia production cadence and milestones
- Cumulative catch-up adjustments and segment margin trend
Counterarguments
- A large portion of work is performed under government-negotiated contract structures that can cap upside margins even with scarce capability
- General Dynamics Electric Boat remains the other nuclear-submarine industrial base and may capture more share of new submarine work
Compliance Advantage
Legal
Compliance Advantage
Strength
Durability
Confidence
Evidence
Naval nuclear operations come with special oversight and consent requirements (including license transfers and change-of-control approvals), reinforcing the incumbent's regulatory and contractual position.
Erosion risks
- Policy or regulatory changes alter indemnification/oversight framework
- Major compliance incident triggers penalties, suspensions, loss of trust, or remediation costs
- Newport News welding-procedure noncompliance investigation creates schedule, quality, or customer-trust risk
Leading indicators
- Nuclear regulatory findings/audit outcomes
- Safety and quality incident rate
- Contract award outcomes after major program reviews
Counterarguments
- Regulatory oversight can also increase cost and reduce operational flexibility (it is both a barrier and a burden)
Ingalls Shipbuilding (Non-Nuclear Shipbuilding)
U.S. Navy and U.S. Coast Guard non-nuclear shipbuilding (amphibious assault ships, surface combatants, cutters)
Revenue/operating profit shares based on Q1 2026 segment sales and service revenues and segment operating income in the Form 10-Q. Ingalls Q1 2026 revenue increased 14%, primarily from higher surface-combatant volume.
Contractual Exclusivity
Legal
Contractual Exclusivity
Strength
Durability
Confidence
Evidence
Sole-builder status in amphibious assault ships and one-of-two builder status in surface combatants create limited competition on rebuys and block buys.
Erosion risks
- Navy/Coast Guard recompetes programs or funds new entrants
- Shifts in force structure reduce demand for amphibious ships/cutters
- Program execution problems cause loss of "shipyard of choice" status
Leading indicators
- Multi-ship procurement / block buy awards (LPD/LHA/DDG)
- Backlog trend and funded-to-unfunded mix
- On-time delivery and quality metrics
Counterarguments
- Even when the supplier base is concentrated, U.S. Government customers can pressure price and terms through competition at award time and contract oversight
Design In Qualification
Demand
Design In Qualification
Strength
Durability
Confidence
Evidence
Being a design agent and qualified builder for complex surface combatants increases switching costs for the customer and raises barriers for new shipyards to win follow-on lots.
Erosion risks
- New ship classes open the door to different yards (qualification reset)
- Customer prioritizes different ship types or autonomous alternatives
Leading indicators
- DDG multi-year award outcomes and option ship exercise rates
- Competition announcements for next-generation surface combatants
- Design-agent scope expansions or reductions
Counterarguments
- Qualification advantages can erode when programs transition to new designs or when the Navy funds additional yards
Long Term Contracts
Demand
Long Term Contracts
Strength
Durability
Confidence
Evidence
Long-cycle, binding defense contracts and multi-ship procurement create continuity for incumbents that perform well, supporting utilization and learning effects.
Erosion risks
- Continuing resolutions / appropriations delays disrupt award timing and production stability
- Contract modifications or terminations for convenience
- Cost growth on fixed-price incentive contracts compresses margins
Leading indicators
- Total backlog and expected conversion rate
- Congressional appropriations outcomes for shipbuilding accounts
- Award-to-bid win rate on new lots
Counterarguments
- Long-term contracts reduce volume uncertainty but do not guarantee attractive returns (cost growth and performance penalties can offset continuity)
Mission Technologies (Defense Tech & Services)
U.S. defense C5ISR, cyber/electronic warfare, autonomy, training (LVC), and fleet sustainment services
Revenue/operating profit shares based on Q1 2026 segment sales and service revenues and segment operating income in the Form 10-Q. Mission Technologies Q1 2026 revenue rose 2%, while segment operating income declined 13%.
Government Contracting Relationships
Legal
Government Contracting Relationships
Strength
Durability
Confidence
Evidence
Deep exposure to U.S. Government demand and contract vehicles can provide repeat business and procurement inertia, especially in mission-critical programs.
Erosion risks
- Competitive recompetes and price pressure on services contracts
- Budget shifts away from Mission Tech priority areas
- Contract award delays from continuing resolutions
Leading indicators
- Mission Technologies backlog and book-to-bill
- Prime vs subcontract mix and win rate on recompetes
- Contract vehicle positions (IDIQ awards, task order wins)
Counterarguments
- The defense IT/services market is crowded; relationships alone may not prevent share loss on recompetes
Compliance Advantage
Legal
Compliance Advantage
Strength
Durability
Confidence
Evidence
Classified work requires personnel and facility clearances and specialized infrastructure; incumbents with compliant processes can access programs that are harder for new entrants.
Erosion risks
- Security incident leads to loss/suspension of clearances
- Policy changes broaden competition or commoditize certain capabilities
Leading indicators
- Clearance posture and audit outcomes
- Mix of classified vs unclassified revenue/backlog
- Material cybersecurity/security incidents
Counterarguments
- Many large defense contractors and federal IT firms also hold clearances, so the barrier is real but not exclusive
Evidence
exclusive prime contractor for nuclear aircraft carrier refueling and complex overhaul
Supports exclusivity in the CVN mid-life overhaul (RCOH) market.
only company currently capable of building, refueling, and inactivating the U.S. Navy's nuclear-powered aircraft carriers
Supports sole-provider position for CVN construction + refueling + inactivation.
our highly trained workforce, the capital-intensive nature of RCOH work
Direct statement of the scale/know-how barrier around nuclear work and carrier overhauls.
one of only two companies in the United States currently capable of designing and building nuclear-powered submarines
Shows the limited-capability set for nuclear submarine production.
contracts with the U.S. Navy for our nuclear shipbuilding operations require us to provide the U.S. Navy with notice
Highlights regulatory/contractual controls tied to nuclear shipbuilding operations.
Showing 5 of 13 sources.
Risks & Indicators
Erosion risks
- U.S. Government shipyards could be upgraded to perform CVN refueling/RCOH
- Defense budget reprioritization reduces CVN procurement or overhaul tempo
- Execution risk (schedule slips, rework, cost growth) damages award prospects
- Workforce shortages and skill dilution (welding, nuclear-qualified trades)
- Supply chain constraints for nuclear-grade components
- Inflation and contract cost growth that is not fully recoverable
Leading indicators
- Navy RCOH award cadence and funding
- U.S. Navy shipbuilding plan (CVN force structure and procurement timing)
- RCOH cycle time / on-time redelivery performance
- Hiring/attrition and apprenticeship throughput
- Virginia/Columbia production cadence and milestones
- Cumulative catch-up adjustments and segment margin trend
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