How Does HEICO Corporation Compare to Its Peers?

Gabriel Kane
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HEICO Reports Strong Earnings in Fiscal 4Q15 and Fiscal 2015

(Continued from Prior Part)

HEICO and its peers

In this article, we’ll compare HEICO (HEI) to its industry peers:

  • The PE (price-to-earnings) ratios of HEICO (HEI), United Technologies (UTX), Honeywell International (HON), Esterline Technologies Corporation (ESL), and Triumph Group (TGI) are 26.4x, 14.6x, 17.2x, 26.7x, and 10.2x, respectively, as of December 15, 2015.

  • The PBV (price-to-book value) ratios of HEICO, United Technologies, Honeywell International, Esterline Technologies Corporation, and Triumph Group are 4.3x, 2.7x, 4.3x, 1.6x, and 0.75x, respectively.

Thus, HEICO Corporation has outperformed its peers based on PE and PBV ratios.

ETFs that invest in HEICO

The SPDR S&P Aerospace & Defense ETF (XAR) invests 2.8% of its holdings in HEI.

The PowerShares Aerospace & Defense Portfolio (PPA) invests 1.3% of its holdings in HEI. The ETF tracks a market cap–weighted index of US-listed stocks in the defense, military, homeland security, and space industries.

The iShares U.S. Aerospace & Defense ETF (ITA) invests 1.1% of its holdings in HEI. The ETF tracks a market cap–weighted index of US manufacturers, assemblers, and distributors of airplane and defense equipment.

Comparing HEICO and its ETFs

Now let’s compare HEICO (HEI) with these ETFs:

  • The YTD (year-to-date) price movements of HEI, XAR, PPA, and ITA are -17.8%, -3.8%, 1.9%, and 2.3%, respectively.

  • The PE ratios of HEI, XAR, PPA, and ITA are 26.4x, 21.8x, 21.4x, and 20.2x, respectively.

  • The PBV ratios of HEICO, XAR, PPA, and ITA are 4.3x, 2.8x, 4.0x, and 3.4x, respectively.

According to the above findings, these ETFs are ahead of HEICO based on price movement. However, HEICO has outperformed these ETFs based on PE and PBV ratios.

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