TAT Technologies (TATT) & HEICO (HEI) Critical Review

TAT Technologies (NASDAQ: TATT) and HEICO (NYSE:HEI) are both aerospace companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.

Dividends

HEICO pays an annual dividend of $0.14 per share and has a dividend yield of 0.2%. TAT Technologies does not pay a dividend. HEICO pays out 8.3% of its earnings in the form of a dividend. HEICO has increased its dividend for 8 consecutive years.

Analyst Ratings

This is a summary of current ratings and target prices for TAT Technologies and HEICO, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TAT Technologies 0 0 0 0 N/A
HEICO 0 3 5 0 2.63

HEICO has a consensus price target of $85.08, indicating a potential downside of 5.66%. Given HEICO’s higher probable upside, analysts plainly believe HEICO is more favorable than TAT Technologies.

Risk and Volatility

TAT Technologies has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500. Comparatively, HEICO has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Profitability

This table compares TAT Technologies and HEICO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TAT Technologies 2.25% 2.93% 2.32%
HEICO 13.26% 14.80% 7.67%

Earnings and Valuation

This table compares TAT Technologies and HEICO’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TAT Technologies $106.53 million 0.70 $2.39 million N/A N/A
HEICO $1.52 billion 6.25 $185.98 million $1.69 53.36

HEICO has higher revenue and earnings than TAT Technologies.

Insider & Institutional Ownership

2.7% of TAT Technologies shares are owned by institutional investors. Comparatively, 23.7% of HEICO shares are owned by institutional investors. 8.8% of TAT Technologies shares are owned by insiders. Comparatively, 9.9% 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.

Summary

HEICO beats TAT Technologies on 14 of the 15 factors compared between the two stocks.

About TAT Technologies

TAT Technologies Ltd., together with its subsidiaries, provides various solutions and services to the commercial and military aerospace, and ground defense industries worldwide. It designs, develops, and manufactures a range of heat transfer solutions, such as pre-cooler and oil/fuel hydraulic heat exchangers used in mechanical and electronic systems in commercial, military, and business aircraft; environmental control and power electronics cooling systems for use in aircraft and ground applications; and a range of other mechanical aircraft accessories and systems, such as pumps, valves, and turbine power units. The company also provides maintenance, repair, and overhaul (MRO) services for heat transfer components; and aviation components, such as APUs, landing gears, and other aircraft components, as well as manufactures heat transfer solutions on original equipment manufacturing basis. In addition, it engages in the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes, afterburner flaps, and other components. The company was formerly known as Galagraph Ltd. and changed its name to TAT Technologies Ltd. in May 1992. TAT Technologies Ltd. was founded in 1985 and is headquartered in Gedera, Israel.

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 for aerospace and industrial original equipment manufacturers, and the United States government. This segment also distributes hydraulic, pneumatic, structural, 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 airlines, 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; high-speed interface products; high voltage interconnection devices; high voltage advanced power electronics; power conversion products; and underwater locator 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; and high performance communications and electronic intercept receivers and tuners. The company serves the U.S. and foreign military agencies; prime defense contractors; and commercial and defense satellite and spacecraft equipment manufacturers. HEICO Corporation was founded in 1949 and is headquartered in Hollywood, Florida.

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