Heico (NYSE:HEI) and Rheinmetall (OTCMKTS:RNMBY) Head-To-Head Comparison

Heico (NYSE:HEI) and Rheinmetall (OTCMKTS:RNMBY) are both large-cap aerospace companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Risk and Volatility

Heico has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Rheinmetall has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500.

Institutional and Insider Ownership

27.1% of Heico shares are owned by institutional investors. 4.9% of Heico shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Heico and Rheinmetall’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heico	16.08%	17.52%	8.86%
Rheinmetall	7.08%	21.40%	7.13%

Dividends

Heico pays an annual dividend of $0.24 per share and has a dividend yield of 0.1%. Rheinmetall pays an annual dividend of $1.90 per share and has a dividend yield of 0.7%. Heico pays out 4.3% of its earnings in the form of a dividend. Rheinmetall pays out 89.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Heico has raised its dividend for 17 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Heico and Rheinmetall, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heico	0	8	8	2	2.67
Rheinmetall	0	1	7	1	3.00

Heico currently has a consensus target price of $371.63, suggesting a potential upside of 13.00%. Given Heico’s higher possible upside, analysts clearly believe Heico is more favorable than Rheinmetall.

Valuation & Earnings

This table compares Heico and Rheinmetall”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heico	$4.49 billion	10.23	$690.39 million	$5.60	58.73
Rheinmetall	$11.24 billion	5.75	$787.45 million	$2.13	130.25

Rheinmetall has higher revenue and earnings than Heico. Heico is trading at a lower price-to-earnings ratio than Rheinmetall, indicating that it is currently the more affordable of the two stocks.

Summary

Heico beats Rheinmetall on 12 of the 18 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. Its 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, and other instruments utilized on military aircraft. The company's 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 frequency (RF) interference shielding and suppression filters; power conversion and interface; interconnection devices; and underwater locator beacons and emergency locator transmission beacons. This segment also offers traveling wave tube amplifiers and microwave power modules; memory products and specialty semiconductors; harsh environment connectivity products and custom molded cable assemblies; RF and microwave products; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems and airborne antennas; nuclear radiation detectors; silicone products; power amplifiers; ceramic-to-metal feedthroughs and connectors; technical surveillance countermeasures equipment; RF receivers and sources; embedded computing solutions; test sockets and adapters; and radiation assurance services. The company was incorporated in 1957 and is headquartered in Hollywood, Florida.

About Rheinmetall

Rheinmetall AG provides mobility and security technologies worldwide. The company operates in five segments: Vehicle Systems, Weapon and Ammunition, Electronic Solutions, Sensors and Actuators, and Materials and Trade. The Vehicle Systems segment offers combat, logistics, support, and special vehicles, including armored tracked vehicles, CBRN protection systems, artillery, turret systems, and wheeled logistics and tactical vehicles. The Weapon and Ammunition segment provides firepower and protection solutions, such as weapons and munition, protection systems, propellants and international projects and services. The Electronic Solutions segment offers a chain of systems network, such as sensors, networking platforms, automated connected effectors for soldiers, and cyberspace protection solutions, and training and simulation solutions. Its products include air defense systems; soldier systems; command, control, and reconnaissance systems; fire control systems; sensors; and simulations for the army, air force, navy, and civil applications. The Sensors and Actuators segment provides a portfolio of products comprising exhaust gas recirculation systems; throttle valves, control dampers, and exhaust flaps for electromotors; solenoid valves; actuators and valve train systems; oil, water, and vacuum pumps for passenger cars, commercial vehicles, and light and heavy-duty off-road applications; and industrial solutions. The Materials and Trade segment develops system components for the basic motors, such as engine blocks, structural components, and cylinder heads; plain bearings, and bushes; and replacement parts. It also engages in the aftermarket activities. The company was formerly known as Rheinmetall Berlin AG and changed its name to Rheinmetall AG in 1996. Rheinmetall AG was founded in 1889 and is headquartered in Düsseldorf, Germany.