Spirit Aerosystems Holdings (NYSE: SPR) and Heico Corporation (NYSE:HEI) are both mid-cap aerospace companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitabiliy, earnings, risk, institutional ownership and analyst recommendations.
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.
Institutional and Insider Ownership
98.7% of Spirit Aerosystems Holdings shares are held by institutional investors. Comparatively, 21.8% of Heico Corporation shares are held by institutional investors. 0.3% of Spirit Aerosystems Holdings shares are held by insiders. Comparatively, 9.8% of Heico Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Profitability
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% |
| Heico Corporation | 12.08% | 15.89% | 8.24% |
Analyst Recommendations
This is a breakdown of current ratings and price targets for Spirit Aerosystems Holdings and Heico Corporation, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Spirit Aerosystems Holdings | 2 | 7 | 5 | 0 | 2.21 |
| Heico Corporation | 0 | 4 | 4 | 0 | 2.50 |
Spirit Aerosystems Holdings presently has a consensus price target of $63.82, suggesting a potential upside of 5.29%. Heico Corporation has a consensus price target of $84.00, suggesting a potential upside of 4.84%. Given Spirit Aerosystems Holdings’ higher possible upside, research analysts clearly believe Spirit Aerosystems Holdings is more favorable than Heico Corporation.
Dividends
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. Spirit Aerosystems Holdings has raised its dividend for 7 consecutive years. Spirit Aerosystems Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Spirit Aerosystems Holdings has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Heico Corporation has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
Summary
Spirit Aerosystems Holdings beats Heico Corporation on 11 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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