Contrasting Saab (OTCMKTS:SAABY) and Heico (NYSE:HEI.A)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Saab and Heico, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saab	2	1	0	0	1.33
Heico	0	1	0	1	3.00

Dividends

Saab pays an annual dividend of $0.05 per share and has a dividend yield of 0.1%. Heico pays an annual dividend of $0.24 per share and has a dividend yield of 0.1%. Saab pays out 6.8% 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.

Insider and Institutional Ownership

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Saab	7.99%	15.73%	5.82%
Heico	15.38%	16.57%	8.34%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saab	$8.42 billion	4.47	$645.29 million	$0.74	47.44
Heico	$4.49 billion	6.61	$690.39 million	$4.57	46.46

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

Volatility & Risk

Saab has a beta of -0.07, indicating that its stock price is 107% less volatile than the S&P 500. Comparatively, Heico has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Summary

Heico beats Saab on 12 of the 15 factors compared between the two stocks.

About Saab

Saab AB (publ) provides products, services, and solutions for military defense, aviation, and civil security markets worldwide. The company operates through Aeronautics, Dynamics, Surveillance, Kockums, and Combitech segments. The company develops military aviation technology, as well as conducts studies on manned and unmanned aircraft. It also provides ground combat weapons, missile systems, torpedoes, unmanned underwater vehicles, training and simulation systems, and signature management systems for armed forces; and niche products for the civil and defense market, such as underwater vehicles for the offshore industry. In addition, the company offers solutions for safety and security, surveillance and decision support, and threat detection, location, and protection, including airborne, ground-based and naval radar, electronic warfare, and combat systems, as well as C4I solutions. Additionally, it provides submarines with the Stirling system for air independent propulsion, surface combatants, mine hunting systems, and autonomous vessels; and systems development, systems integration, information security, systems security, communications, mechanics, and technical product information and logistics. Saab AB (publ) was incorporated in 1937 and is headquartered in Stockholm, Sweden.

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.