LMI Aerospace (NASDAQ: LMIA) and Heico Corporation (NYSE:HEI) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Institutional & Insider Ownership

46.9% of LMI Aerospace shares are owned by institutional investors. Comparatively, 23.1% of Heico Corporation shares are owned by institutional investors. 17.5% of LMI Aerospace shares are owned by company insiders. Comparatively, 9.8% of Heico Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares LMI Aerospace and Heico Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LMI Aerospace -7.72% -31.20% -6.63%
Heico Corporation 12.08% 15.89% 8.24%

Earnings and Valuation

This table compares LMI Aerospace and Heico Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LMI Aerospace N/A N/A N/A ($3.04) -4.60
Heico Corporation $1.43 billion 1.96 $352.83 million $2.02 41.07

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

Analyst Ratings

This is a breakdown of recent ratings for LMI Aerospace and Heico Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LMI Aerospace 0 1 0 0 2.00
Heico Corporation 0 5 3 0 2.38

Heico Corporation has a consensus price target of $83.57, suggesting a potential upside of 0.85%. Given Heico Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Heico Corporation is more favorable than LMI Aerospace.

Dividends

Heico Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. LMI Aerospace does not pay a dividend. Heico Corporation pays out 7.9% of its earnings in the form of a dividend. Heico Corporation has increased its dividend for 7 consecutive years.

Volatility and Risk

LMI Aerospace has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500. Comparatively, Heico Corporation has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Summary

Heico Corporation beats LMI Aerospace on 10 of the 14 factors compared between the two stocks.

About LMI Aerospace

LMI Aerospace, Inc. is a supplier of structural assemblies, kits and components, and design engineering services to the aerospace and defense markets. The Company operates in two business segments consisting of its Aerostructures segment and its Engineering Services segment. Its Aerostructures segment fabricates, machines, finishes, integrates, assembles and kits machined and formed close tolerance aluminum, specialty alloy and composite components and higher level assemblies for use by the aerospace and defense industries. Its Engineering Services segment provides a range of design, engineering and program management services, supporting aircraft product lifecycles from conceptual design, analysis and certification through production support, fleet support and service life extensions through an engineering solution to original equipment manufacturers (OEMs) and Tier 1 aerospace suppliers, and airline operators.

About Heico Corporation

HEICO Corporation manufactures Federal Aviation Administration (FAA)-approved jet engine and aircraft component replacement parts, other than the original equipment manufacturers (OEMs) and their subcontractors. The Company also manufactures various types of electronic equipment for the aviation, medical, telecommunications and electronics industries. It operates through two segments: Flight Support Group (FSG) and Electronic Technologies Group (ETG). The FSG segment consists of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their collective subsidiaries. The FSG segment designs and manufactures jet engine and aircraft component replacement parts. The ETG segment consists of HEICO Electronic Technologies Corp. and its subsidiaries. The ETG segment designs and produces mission-critical subcomponents for various markets, which are utilized in larger systems, including targeting, tracking, identification, testing, communications, telecom and computer systems.

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