Spirit Aerosystems Holdings (NYSE:SPR) vs. Heico Corporation (HEI) Critical Analysis
Spirit Aerosystems Holdings (NYSE: SPR) and Heico Corporation (NYSE:HEI) are both mid-cap aerospace companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitabiliy and analyst recommendations.
This table compares Spirit Aerosystems Holdings and Heico Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Spirit Aerosystems Holdings||6.46%||28.51%||10.05%|
Spirit Aerosystems Holdings pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Heico Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. Spirit Aerosystems Holdings pays out 11.2% of its earnings in the form of a dividend. Heico Corporation pays out 7.9% 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. Heico Corporation has raised its dividend for 7 consecutive years.
This is a summary of current ratings and recommmendations for Spirit Aerosystems Holdings and Heico Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Spirit Aerosystems Holdings||2||7||5||0||2.21|
Spirit Aerosystems Holdings currently has a consensus target price of $63.82, suggesting a potential upside of 5.29%. Heico Corporation has a consensus target price of $84.00, suggesting a potential upside of 4.84%. Given Spirit Aerosystems Holdings’ higher probable upside, research analysts plainly believe Spirit Aerosystems Holdings is more favorable than Heico Corporation.
Earnings and Valuation
This table compares Spirit Aerosystems Holdings and Heico Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Spirit Aerosystems Holdings||$6.81 billion||1.07||$915.60 million||$3.57||16.98|
|Heico Corporation||$1.43 billion||4.72||$352.83 million||$2.02||39.70|
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.
Insider & Institutional Ownership
98.7% of Spirit Aerosystems Holdings shares are owned by institutional investors. Comparatively, 21.8% of Heico Corporation shares are owned by institutional investors. 0.3% of Spirit Aerosystems Holdings shares are owned by insiders. Comparatively, 9.8% of Heico Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Volatility and Risk
Spirit Aerosystems Holdings has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Heico Corporation has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.
Spirit Aerosystems Holdings beats Heico Corporation on 10 of the 17 factors compared between the two stocks.
About Spirit Aerosystems Holdings
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.
About Heico Corporation
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.
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