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Reasons to Add HEICO Stock to Your Portfolio Right Now

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HEICO Corporation (HEI - Free Report) , with rising earnings estimates, robust ROE, strong liquidity and low debt, offers a great investment opportunity in the Zacks Aerospace Defense Equipment industry.

Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock an attractive investment pick at the moment.

HEI’s Growth Projections & Surprise History
 

The Zacks Consensus Estimate for HEI’s fiscal 2024 earnings per share (EPS) has increased 0.3% to $3.65 in the past 60 days. The Zacks Consensus Estimate for the company’s total revenues for fiscal 2024 stands at $3.89 billion, which indicates growth of 31.1% from the 2023 reported figure.

The company’s long-term (three to five years) earnings growth rate is 19.4%. It delivered an average earnings surprise of 12.23% in the last four quarters.

HEICO’s ROE
 

Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, HEICO’s ROE is 14.51% compared to its industry’s average of 11.03%. This indicates that the company has been utilizing its funds more constructively than its peers in the sector.

HEI’s Debt Position
 

Currently, HEICO’s total debt to capital is 38.58%, much better than the industry’s average of 56.27%.

HEI’s times interest earned ratio (TIE) at the end of the third quarter of fiscal 2024 was 5.1. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

HEI’s Liquidity
 

HEI’s current ratio at the end of the third quarter of fiscal 2024 was 3.30, higher than the industry’s average of 1.41. The ratio being greater than one indicates the company’s ability to meet its future short-term liabilities without difficulties.

HEI Stock Price Performance
 

In the past six months, HEICO shares have risen 25.4% compared with its industry’s return of 13.4%.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider
 

A few other top-ranked stocks from the same industry are Curtiss-Wright Corp. (CW - Free Report) , Mercury Systems (MRCY - Free Report) and BAE Systems (BAESY - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Curtiss-Wright delivered an average earnings surprise of 12.78% in the last four quarters. The Zacks Consensus Estimate for CW’s total revenues for 2024 stands at $3.08 billion, which indicates growth of 8.1% from the 2023 reported figure.

MRCY’s long-term earnings growth rate is 13.2%. The Zacks Consensus Estimate for Mercury Systems’ total revenues for fiscal 2025 stands at $847.8 million, which indicates year-over-year growth of 1.5%.

BAE Systems’ long-term earnings growth rate is 12.4%. The Zacks Consensus Estimate for BAESY’s 2024 sales is pegged at $36.22 billion, which implies an improvement of 37.7% from the 2023 reported sales figure.

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