Reviewing Heico (HEI) and The Competition

Heico (NYSE:HEI) is one of 229 public companies in the “Aerospace & Defense” industry, but how does it weigh in compared to its peers? We will compare Heico to related companies based on the strength of its risk, analyst recommendations, institutional ownership, valuation, profitability, dividends and earnings.

Insider & Institutional Ownership

27.1% of Heico shares are held by institutional investors. Comparatively, 49.5% of shares of all “Aerospace & Defense” companies are held by institutional investors. 4.9% of Heico shares are held by insiders. Comparatively, 11.8% of shares of all “Aerospace & Defense” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Heico and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heico	0	7	9	2	2.72
Heico Competitors	2162	8279	12805	581	2.50

Heico currently has a consensus target price of $387.33, indicating a potential upside of 13.23%. As a group, “Aerospace & Defense” companies have a potential upside of 29.20%. Given Heico’s peers higher possible upside, analysts clearly believe Heico has less favorable growth aspects than its peers.

Dividends

Heico pays an annual dividend of $0.26 per share and has a dividend yield of 0.1%. Heico pays out 4.3% of its earnings in the form of a dividend. As a group, “Aerospace & Defense” companies pay a dividend yield of 1.1% and pay out 38.4% of their earnings in the form of a dividend. Heico has increased its dividend for 17 consecutive years.

Volatility & Risk

Heico has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Heico’s peers have a beta of 1.31, meaning that their average stock price is 31% more volatile than the S&P 500.

Valuation and Earnings

This table compares Heico and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Heico	$5.18 billion	$690.39 million	56.92
Heico Competitors	$8.47 billion	$569.01 million	22.01

Heico’s peers have higher revenue, but lower earnings than Heico. Heico is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Heico and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heico	16.38%	18.00%	9.15%
Heico Competitors	-347.37%	-49.10%	-4.38%

Summary

Heico beats its peers on 8 of the 15 factors compared.

About Heico

HEICO Corporation is an aerospace and electronics company that develops, manufactures and services products for commercial aviation, defense, space and other markets. Its Flight Support Group supplies replacement parts for aircraft and provides repair and overhaul services for aircraft components, while its Electronic Technologies Group makes specialized electronic, electro-optical and other technology products. The company’s products and services support airlines, aircraft operators, original equipment manufacturers, government agencies and defense contractors.