Huntington Ingalls Industries, Inc. (HII) vs Oracle Corporation (ORCL): Which Is the Better Buy in 2026?
As of 2026-06-19, HII is undervalued at $285, with a DCF intrinsic value of $498 and a margin of safety of 43%. ORCL is undervalued at $184, with an intrinsic value of $285 and a margin of safety of 35%. Of the two, HII has the wider margin of safety.
Rewards
- ★Free cash flow has grown at a 18.1% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Oracle Corporation has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★Gross margin of 65.8% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Return on equity has consistently exceeded 20% over 3 years, indicating efficient use of shareholder capital.
Risks
- ⚠Gross margin of 12.4% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠FCF yield of 5.6% suggests reasonable valuation assuming continued moderate growth.
- ⚠Despite buyback spending, shares outstanding increased in 3 out of 4 years — stock-based compensation is offsetting repurchases.
- ⚠High leverage (2.89x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠Insiders have sold $2.6M worth of stock in the past 3 months — significant insider liquidation.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $285?
The market implies +9.7% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +9.0%, reflecting heavy growth investment.
Requires positive FCF to compute implied growth rate.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Narrow moat with revenue predictability as the key competitive advantage. Improving reinvestment efficiency would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pessimistic — investigate whether fears are temporary or structural"
"Market is pessimistic — investigate whether fears are temporary or structural"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: HII vs ORCL
Is Huntington Ingalls Industries, Inc. or Oracle Corporation more undervalued in 2026?▼
Based on our discounted cash flow model, HII trades at a 42.7% margin of safety (intrinsic value $498 vs. price $285), compared to ORCL's 35.4% margin of safety (intrinsic $285 vs. $184).
Which stock has a wider economic moat, Huntington Ingalls Industries, Inc. or Oracle Corporation?▼
ORCL scores 68/100 (Narrow moat), while HII scores 57/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Oracle Corporation in financial distress?▼
ORCL's Altman Z-Score of 2.7 places it in the Grey zone, signaling elevated bankruptcy risk. HII scores 2.8 (Grey zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Huntington Ingalls Industries, Inc. or Oracle Corporation?▼
Huntington Ingalls Industries, Inc. (HII) generates a 5.6% free cash flow yield, compared to Oracle Corporation's -3.8%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Huntington Ingalls Industries, Inc. or Oracle Corporation?▼
ORCL earns 9.7% ROIC versus HII's 8.2%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Huntington Ingalls Industries, Inc.'s or Oracle Corporation's?▼
HII's dividend earns a safety score of 94/100 (Very Safe), compared to ORCL's 79/100 (Safe). HII has raised its dividend for 3 consecutive years.