Heico Corporation (NYSE: HEI) and Spirit Aerosystems Holdings (NYSE:SPR) are both mid-cap aerospace companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.
Volatility and Risk
Heico Corporation has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Spirit Aerosystems Holdings has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.
Heico Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. Spirit Aerosystems Holdings pays an annual dividend of $0.40 per share and has a dividend yield of 0.6%. Heico Corporation pays out 7.9% of its earnings in the form of a dividend. Spirit Aerosystems Holdings pays out 14.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Spirit Aerosystems Holdings has increased its dividend for 7 consecutive years. Spirit Aerosystems Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Heico Corporation and Spirit Aerosystems Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Spirit Aerosystems Holdings||4.97%||30.82%||10.70%|
Valuation and Earnings
This table compares Heico Corporation and Spirit Aerosystems Holdings’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Heico Corporation||$1.43 billion||1.96||$352.83 million||$2.02||41.07|
|Spirit Aerosystems Holdings||$6.80 billion||1.22||$739.20 million||$2.74||25.60|
Spirit Aerosystems Holdings has higher revenue and earnings than Heico Corporation. Spirit Aerosystems Holdings is trading at a lower price-to-earnings ratio than Heico Corporation, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Heico Corporation and Spirit Aerosystems Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Spirit Aerosystems Holdings||2||7||8||0||2.35|
Heico Corporation presently has a consensus price target of $83.57, suggesting a potential upside of 0.85%. Spirit Aerosystems Holdings has a consensus price target of $69.36, suggesting a potential downside of 1.13%. Given Heico Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Heico Corporation is more favorable than Spirit Aerosystems Holdings.
Institutional and Insider Ownership
23.1% of Heico Corporation shares are owned by institutional investors. Comparatively, 99.3% of Spirit Aerosystems Holdings shares are owned by institutional investors. 9.8% of Heico Corporation shares are owned by company insiders. Comparatively, 0.3% of Spirit Aerosystems Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Spirit Aerosystems Holdings beats Heico Corporation on 10 of the 17 factors compared between the two stocks.
Heico Corporation Company Profile
HEICO Corporation manufactures Federal Aviation Administration (FAA)-approved jet engine and aircraft component replacement parts, other than the original equipment manufacturers (OEMs) and their subcontractors. The Company also manufactures various types of electronic equipment for the aviation, medical, telecommunications and electronics industries. It operates through two segments: Flight Support Group (FSG) and Electronic Technologies Group (ETG). The FSG segment consists of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their collective subsidiaries. The FSG segment designs and manufactures jet engine and aircraft component replacement parts. The ETG segment consists of HEICO Electronic Technologies Corp. and its subsidiaries. The ETG segment designs and produces mission-critical subcomponents for various markets, which are utilized in larger systems, including targeting, tracking, identification, testing, communications, telecom and computer systems.
Spirit Aerosystems Holdings Company Profile
Spirit AeroSystems Holdings, Inc. is a non-original equipment manufacturer (OEM), aircraft parts designer and manufacturer of commercial aero-structures. The Company is also a supplier of aero-structures. The Company operates through three segments: Fuselage Systems, Propulsion Systems and Wing Systems. The Fuselage Systems segment includes the development, production and marketing of forward, mid and rear fuselage sections and systems. The Propulsion Systems segment includes the development, production and marketing of struts/pylons, nacelles (including thrust reversers) and related engine structural components. The Wing Systems segment includes the development, production and marketing of wings and wing components (including flight control surfaces), and other miscellaneous structural parts. The Company’s maintenance, repair and overhaul (MRO) services include repair stations that provide complete on-site repair and overhaul.
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