Heico (NYSE:HEI.A) & CAE (NYSE:CAE) Head-To-Head Analysis

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

Institutional and Insider Ownership

67.4% of CAE shares are held by institutional investors. Comparatively, 59.0% of Heico shares are held by institutional investors. 18.3% of CAE shares are held by company insiders. Comparatively, 9.8% of Heico shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for CAE and Heico, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAE	1	4	5	0	2.40
Heico	0	1	0	1	3.00

CAE currently has a consensus price target of $31.00, suggesting a potential upside of 17.20%. Given CAE’s higher probable upside, analysts clearly believe CAE is more favorable than Heico.

Risk and Volatility

CAE has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Heico has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Valuation and Earnings

This table compares CAE and Heico”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAE	$4.91 billion	1.73	$226.62 million	$0.71	37.25
Heico	$4.91 billion	7.45	$690.39 million	$5.60	46.80

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CAE	6.36%	7.45%	3.51%
Heico	16.08%	17.52%	8.86%

Dividends

CAE pays an annual dividend of $0.33 per share and has a dividend yield of 1.2%. Heico pays an annual dividend of $0.26 per share and has a dividend yield of 0.1%. CAE pays out 46.3% 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.

Summary

Heico beats CAE on 11 of the 17 factors compared between the two stocks.

About CAE

CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and Rest of the Americas. It operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as aircraft flight operations solutions. The Defense and Security segment operates as a training and simulation provider that delivers platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.

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.