10 Best Defense Stocks To Buy Now

04. HEICO Corporation (NYSE:HEI)

Number of Hedge Fund Holders: 53

HEICO Corporation (NYSE:HEI), a major player in the defense and aerospace industries, stands out as a top defense stock to consider. The company’s impressive performance in recent quarters highlights its strength and resilience, making it a compelling investment for those looking to capitalize on the defense sector’s growth. In the third quarter of fiscal 2024, HEICO Corporation (NYSE:HEI) delivered record results, showcasing its robust position in both the commercial aviation and defense markets. Consolidated net income surged 34% to $136.6 million, or $0.97 per diluted share, up from $102 million, or $0.74 per diluted share, in the same period last year. This significant increase underscores HEICO Corporation (NYSE:HEI) effective management and operational excellence. The Flight Support Group, a key component of HEICO Corporation (NYSE:HEI), achieved all-time highs in net sales and operating income, with net sales up 68% and operating income rising 72% year-over-year. This performance was driven by a 15% organic growth in demand for commercial aerospace products and services, coupled with the positive impact of recent acquisitions.

Financial metrics further bolster HEICO Corporation (NYSE:HEI) investment appeal. The company’s consolidated EBITDA climbed 45% to $261.4 million, up from $179.8 million a year ago. This growth was accompanied by a reduction in the net debt-to-EBITDA ratio to 2.11x, down from 3.04x previously. Such a strong balance sheet and improved leverage position HEICO well for future growth and financial stability. Additionally, operating cash flow increased by 47% to $214 million, reflecting the company’s robust cash generation capabilities.

HEICO’s acquisition strategy has also been fruitful, with recent deals enhancing its product offerings and market reach. Notable acquisitions include the purchase of assets from Honeywell International to support key cockpit display products and the acquisition of Capewell Aerial Systems’ aerial delivery and descent divisions. These strategic moves not only diversify HEICO Corporation (NYSE:HEI) portfolio but also position it for continued growth in the defense sector.

The Electronic Technologies Group, while experiencing slight declines in certain product categories, has seen strong demand in defense, space, and aerospace sectors. The group’s operating margin improved to 23.5%, indicating effective cost management and operational efficiency. Overall, HEICO’s impressive financial performance, strategic acquisitions, and strong market position make it a standout choice for investors seeking exposure to the defense sector. With continued growth in defense spending and HEICO Corporation (NYSE:HEI) proven ability to capitalize on market opportunities, the company represents a solid investment in the defense space.