BWX Technologies (BWXT) versus Heico Corporation (HEI) Critical Comparison

BWX Technologies (NYSE: BWXT) and Heico Corporation (NYSE:HEI) are both mid-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitabiliy, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Risk & Volatility

BWX Technologies has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500. Comparatively, Heico Corporation has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Insider and Institutional Ownership

96.5% of BWX Technologies shares are owned by institutional investors. Comparatively, 21.3% of Heico Corporation shares are owned by institutional investors. 0.8% of BWX Technologies 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, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

BWX Technologies pays an annual dividend of $0.44 per share and has a dividend yield of 0.9%. Heico Corporation pays an annual dividend of $0.14 per share and has a dividend yield of 0.2%. BWX Technologies pays out 24.0% of its earnings in the form of a dividend. Heico Corporation pays out 6.9% 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. BWX Technologies has increased its dividend for 7 consecutive years. BWX Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for BWX Technologies and Heico Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BWX Technologies 0 1 4 0 2.80
Heico Corporation 0 4 4 0 2.50

BWX Technologies presently has a consensus target price of $51.40, indicating a potential upside of 7.82%. Heico Corporation has a consensus target price of $83.71, indicating a potential upside of 14.83%. Given Heico Corporation’s higher possible upside, analysts plainly believe Heico Corporation is more favorable than BWX Technologies.

Profitability

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

Net Margins Return on Equity Return on Assets
BWX Technologies 11.63% 98.16% 12.64%
Heico Corporation 12.08% 15.89% 8.24%

Earnings and Valuation

This table compares BWX Technologies and Heico Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BWX Technologies $1.61 billion 2.93 $316.03 million $1.83 26.05
Heico Corporation $1.43 billion 4.30 $352.83 million $2.02 36.13

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

Summary

Heico Corporation beats BWX Technologies on 9 of the 16 factors compared between the two stocks.

About BWX Technologies

BWX Technologies, Inc. is a manufacturer of nuclear components and a service provider. The Company’s businesses focus on the design, engineering and manufacture of precision naval nuclear components, reactors and nuclear fuel for the United States Government. Its segments include Nuclear Operations, Technical Services, Nuclear Energy and Other. It provides uranium processing and environmental site restoration services, as well as a range of products and services to customers in the nuclear power industry. Nuclear Operations engineers, designs and manufactures precision naval nuclear components and reactors for the United States Department of Energy/National Nuclear Security Administration’s Naval Nuclear Propulsion Program. Technical Services provides various services to the United States Government. Nuclear Energy designs, licenses, manufactures and delivers commercial nuclear steam generators, pressure vessels, reactor components, heat exchangers and other auxiliary equipment.

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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