Heico (NYSE:HEI.A – Get Free Report) and Transdigm Group (NYSE:TDG – Get Free Report) are both large-cap aerospace companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.
Institutional & Insider Ownership
59.0% of Heico shares are held by institutional investors. Comparatively, 95.8% of Transdigm Group shares are held by institutional investors. 9.8% of Heico shares are held by company insiders. Comparatively, 4.1% of Transdigm Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares Heico and Transdigm Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Heico | 15.39% | 16.80% | 8.36% |
| Transdigm Group | 21.69% | -31.91% | 9.53% |
Risk and Volatility
Analyst Ratings
This is a summary of recent ratings and target prices for Heico and Transdigm Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Heico | 0 | 1 | 0 | 1 | 3.00 |
| Transdigm Group | 0 | 4 | 12 | 1 | 2.82 |
Transdigm Group has a consensus price target of $1,597.00, indicating a potential upside of 10.13%. Given Transdigm Group’s higher possible upside, analysts plainly believe Transdigm Group is more favorable than Heico.
Earnings & Valuation
This table compares Heico and Transdigm Group”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Heico | $4.49 billion | 8.36 | $690.39 million | $4.57 | 58.84 |
| Transdigm Group | $8.83 billion | 9.25 | $2.07 billion | $32.08 | 45.20 |
Transdigm Group has higher revenue and earnings than Heico. Transdigm Group is trading at a lower price-to-earnings ratio than Heico, indicating that it is currently the more affordable of the two stocks.
Summary
Transdigm Group beats Heico on 9 of the 14 factors compared between the two stocks.
About Heico
HEICO Corporation, through its subsidiaries, designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally. The company's Flight Support Group segment provides jet engine and aircraft component replacement parts; thermal insulation blankets and parts; renewable/reusable insulation systems; and specialty components. This segment also distributes hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components for the commercial, regional, and general aviation markets; and offers repair and overhaul services for jet engine and aircraft component parts, avionics, instruments, composites, and flight surfaces of commercial aircraft, as well as for avionics and navigation systems, subcomponents, and other instruments utilized on military aircraft. Its Electronic Technologies Group segment provides electro-optical infrared simulation and test equipment; electro-optical laser products; electro-optical, microwave, and other power equipment; electromagnetic and radio interference shielding and suppression filters; high-speed interface products; high voltage interconnection devices; high voltage advanced power electronics; power conversion products; and underwater locator beacons and emergency locator transmission beacons. This segment also offers traveling wave tube amplifiers and microwave power modules; three-dimensional microelectronic and stacked memory products; harsh environment connectivity products and custom molded cable assemblies; radio frequency and microwave amplifiers, transmitters, and receivers; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems; and nuclear radiation detectors. The company serves customers primarily in the aviation, defense, space, medical, telecommunications, and electronics industries. HEICO Corporation was founded in 1957 and is headquartered in Hollywood, Florida.
About Transdigm Group
TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.
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