Financial Review: Heico (NYSE:HEI) vs. Moog (NYSE:MOG.A)

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

Institutional & Insider Ownership

88.0% of Moog shares are held by institutional investors. Comparatively, 27.1% of Heico shares are held by institutional investors. 1.5% of Moog shares are held by insiders. Comparatively, 4.9% of Heico shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Moog has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Heico has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Moog and Heico, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moog	0	0	2	1	3.33
Heico	0	5	9	3	2.88

Moog presently has a consensus target price of $485.00, indicating a potential upside of 18.48%. Heico has a consensus target price of $374.56, indicating a potential upside of 7.22%. Given Moog’s stronger consensus rating and higher possible upside, equities analysts plainly believe Moog is more favorable than Heico.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Moog	6.83%	16.11%	7.15%
Heico	16.08%	17.52%	8.86%

Dividends

Moog pays an annual dividend of $1.20 per share and has a dividend yield of 0.3%. Heico pays an annual dividend of $0.26 per share and has a dividend yield of 0.1%. Moog pays out 13.5% of its earnings in the form of a dividend. Heico pays out 4.6% 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 has increased its dividend for 17 consecutive years.

Earnings and Valuation

This table compares Moog and Heico”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moog	$3.86 billion	3.36	$235.03 million	$8.89	46.04
Heico	$4.49 billion	10.88	$690.39 million	$5.60	62.38

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

Summary

Heico beats Moog on 13 of the 18 factors compared between the two stocks.

About Moog

Moog Inc. designs, manufactures, and integrates precision motion and fluid controls and controls systems for original equipment manufacturers and end users in the aerospace, defense, and industrial markets worldwide. The company's Aircrafts Controls segment offers primary and secondary flight controls for military and commercial aircrafts; aftermarket support services; and ground-based navigation aids. Its Space and Defense Controls segment provides controls for satellites, space vehicles, launch vehicles, armored combat vehicles, tactical and strategic missiles, security and surveillance, and other defense applications; and gun aiming, stabilization, and automatic ammunition loading for armored combat vehicles. This segment also offers controls for steering tactical and strategic missiles, and naval surface ships and submarines; and weapons stores management systems for light attack aerial reconnaissance, ground, and sea platforms, as well as slip rings, fiber optic rotary joints, and motors. The company's Industrial Systems segment provides components and systems for applications in injection and blow molding machinery, metal forming presses, and heavy industry customers in steel and aluminum production; supplies electromechanical motion simulation bases for the flight simulation and training applications; and supplies solutions for power generation applications, as well as custom test systems and controls for automotive, structural, and fatigue testing. This segment also offers systems and components for applications in oil and gas exploration and production; components for wind turbine applications; components and systems for diagnostic imaging CT scan medical equipment, sleep apnea equipment, oxygen concentrators, infusion therapy, and enteral clinical nutrition; and hydraulics, slip rings, rotary unions and fiber optic rotary joints, motors, and infusion and enteral pumps. The company was founded in 1951 and is headquartered in East Aurora, New York.

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.