Head-To-Head Analysis: Heico (NYSE:HEI.A) versus Rheinmetall (OTCMKTS:RNMBY)

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

Risk and Volatility

Rheinmetall has a beta of 0.12, indicating that its share price is 88% less volatile than the S&P 500. Comparatively, Heico has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Dividends

Rheinmetall pays an annual dividend of $1.26 per share and has a dividend yield of 0.4%. Heico pays an annual dividend of $0.24 per share and has a dividend yield of 0.1%. Rheinmetall pays out 50.0% of its earnings in the form of a dividend. Heico pays out 5.3% 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.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rheinmetall	1	0	5	1	2.86
Heico	0	1	0	1	3.00

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rheinmetall	$11.24 billion	7.09	$787.27 million	$2.52	136.39
Heico	$4.49 billion	6.63	$690.39 million	$4.57	46.66

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.

Institutional and Insider Ownership

59.0% of Heico shares are owned by institutional investors. 9.8% of Heico shares are owned 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 Rheinmetall and Heico’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rheinmetall	N/A	N/A	N/A
Heico	15.38%	16.57%	8.34%

Summary

Heico beats Rheinmetall on 9 of the 15 factors compared between the two stocks.

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.

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.