Critical Contrast: Heico Corporation (HEI) versus LMI Aerospace (NASDAQ:LMIA)
Heico Corporation (NYSE: HEI) and LMI Aerospace (NASDAQ:LMIA) are both aerospace companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitabiliy.
Volatility and Risk
Heico Corporation has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, LMI Aerospace has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500.
This is a breakdown of current ratings for Heico Corporation and LMI Aerospace, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Heico Corporation presently has a consensus target price of $84.00, suggesting a potential upside of 8.40%. Given Heico Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Heico Corporation is more favorable than LMI Aerospace.
Heico Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. LMI Aerospace does not pay a dividend. Heico Corporation pays out 7.9% of its earnings in the form of a dividend. LMI Aerospace has increased its dividend for 7 consecutive years.
Valuation and Earnings
This table compares Heico Corporation and LMI Aerospace’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Heico Corporation||$1.43 billion||1.83||$352.83 million||$2.02||38.40|
Heico Corporation has higher revenue and earnings than LMI Aerospace. LMI Aerospace is trading at a lower price-to-earnings ratio than Heico Corporation, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
21.4% of Heico Corporation shares are owned by institutional investors. Comparatively, 46.9% of LMI Aerospace shares are owned by institutional investors. 9.8% of Heico Corporation shares are owned by insiders. Comparatively, 17.5% of LMI Aerospace shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares Heico Corporation and LMI Aerospace’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Heico Corporation beats LMI Aerospace on 9 of the 14 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.
LMI Aerospace Company Profile
LMI Aerospace, Inc. is a supplier of structural assemblies, kits and components, and design engineering services to the aerospace and defense markets. The Company operates in two business segments consisting of its Aerostructures segment and its Engineering Services segment. Its Aerostructures segment fabricates, machines, finishes, integrates, assembles and kits machined and formed close tolerance aluminum, specialty alloy and composite components and higher level assemblies for use by the aerospace and defense industries. Its Engineering Services segment provides a range of design, engineering and program management services, supporting aircraft product lifecycles from conceptual design, analysis and certification through production support, fleet support and service life extensions through an engineering solution to original equipment manufacturers (OEMs) and Tier 1 aerospace suppliers, and airline operators.
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