Financial Review: Rocket Lab (NASDAQ:RKLB) & Heico (NYSE:HEI)

Heico (NYSE:HEI) and Rocket Lab (NASDAQ:RKLB) 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, valuation, institutional ownership, earnings, dividends and risk.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heico	$4.49 billion	9.09	$690.39 million	$5.06	57.80
Rocket Lab	$601.80 million	69.76	-$198.21 million	($0.37)	-212.41

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

Insider & Institutional Ownership

27.1% of Heico shares are owned by institutional investors. Comparatively, 71.8% of Rocket Lab shares are owned by institutional investors. 4.9% of Heico shares are owned by company insiders. Comparatively, 11.9% of Rocket Lab shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Heico	15.38%	16.57%	8.34%
Rocket Lab	-32.94%	-19.01%	-10.66%

Risk & Volatility

Heico has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Rocket Lab has a beta of 2.2, indicating that its stock price is 120% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Heico and Rocket Lab, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heico	0	7	11	0	2.61
Rocket Lab	1	7	7	1	2.50

Heico currently has a consensus price target of $364.43, indicating a potential upside of 24.61%. Rocket Lab has a consensus price target of $75.92, indicating a potential downside of 3.40%. Given Heico’s stronger consensus rating and higher possible upside, research analysts clearly believe Heico is more favorable than Rocket Lab.

Summary

Heico beats Rocket Lab on 10 of the 15 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 Rocket Lab

Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. The company provides launch services, spacecraft design services, spacecraft components, spacecraft manufacturing, and other spacecraft and on-orbit management solutions; and constellation management services, as well as designs and manufactures small and medium-class rockets. It also designs, manufactures, and sells Electron, a reusable orbital-class small rocket; and the Photon satellite platforms, as well as developing the Neutron 8-ton payload class launch vehicle; conducts remote launch activities; and designs and manufactures a range of components and subsystems for the Photon family of spacecraft and broader merchant spacecraft components. The company serves commercial, aerospace prime contractors, and government customers. Rocket Lab USA, Inc. was founded in 2006 and is headquartered in Long Beach, California.