In today’s video, I tell you about a high-quality stock that pays big, growing, reliable dividends. These growing dividends are funded by growing profit because this business is engaged in providing necessary sovereign defense products and services.

Think back to thousands of years ago. Societies had bows and arrows to protect themselves with. Thousands of years later, here we are with the nuclear-powered aircraft carriers this business manufactures. The sovereign defense was necessary way back when. It's necessary now. And it'll be necessary well into the future. That kind of certainty could do your portfolio some good. As could the growing dividends this business is handing out.

I've personally invested in stocks just like this one on my way to going from below broke at age 27 to financially free at 33. Best of all, the stock looks undervalued right now. Price is what you pay. But value is what you get. Why’s that important? Because buying a dividend growth stock when it’s undervalued should provide for a higher yield, greater long-term total return potential, and reduced risk.

With this in mind, in today's video share an opportunity I recently came across shares of Huntington Ingalls Industries (HII), which appear to be trading at a significant discount today.

I valued shares using a dividend discount model analysis. I factored in a 10% discount rate and a long-term dividend growth rate of 8%. The dividend discount model analysis gives me a fair value of $246.24.

Morningstar rates HII as a 4-star stock, with a fair value estimate of $191.00.

CFRA rates HII as a 4-star "BUY", with a 12-month target price of $215.00.

I came out somewhat high. Averaging the three numbers out gives us a final valuation of $217.41, which would indicate the stock is possibly 16% undervalued.

Here's the bottom line, guys: Huntington Ingalls Industries Inc. is a high-quality defense contractor with durable competitive advantages and a massive backlog. This business model offers certainty in an uncertain world. With a market-beating dividend, almost 10 straight years of dividend increases, double-digit dividend growth, a very low payout ratio, and the potential that shares are 16% undervalued, dividend growth investors would be wise to consider defending their portfolios with this stock.

Video Length: 00:11:42