HEI (Heico Corporation): Themes, ETFs, and Basket Ideas
Last updated June 2026
Short answer
What does Heico Corporation do?
HEICO Corporation is a diversified aerospace and defense company best known for making FAA-approved replacement parts for commercial jet engines and aircraft. Its Flight Support Group designs and manufactures aftermarket parts that are functionally equivalent to original equipment manufacturer (OEM) parts but sold at lower prices, plus it repairs and overhauls components. Its Electronic Technologies Group makes specialized electronic, microwave, and electro-optical products for defense, space, medical, and other demanding applications. HEICO makes money by selling parts and services that airlines, MRO shops, and defense primes need on a recurring basis, often tied to aircraft flight hours and fleet aging. The company is controlled by the Mendelson family and has a long record of disciplined, acquisition-driven growth, having bought dozens of niche suppliers over the years. Founded in its current form in the 1950s and headquartered in Hollywood, Florida, HEICO is widely regarded as a high-quality compounder in aerospace.
Where is Heico Corporation heading?
1. Aftermarket parts moat.
HEICO's core advantage is its library of FAA Parts Manufacturer Approval (PMA) certifications, which let it sell cheaper alternatives to OEM jet engine and aircraft parts. Each certification is costly and slow to obtain, creating a durable barrier. As the global commercial fleet ages and airlines seek to cut maintenance costs, demand for these lower-priced replacement parts tends to grow steadily.
2. Acquisition-driven growth.
HEICO has acquired dozens of small, specialized suppliers over decades, often founder-led niche businesses. Management is known for paying reasonable prices, retaining operators, and decentralizing operations. This serial acquisition engine has compounded revenue and earnings consistently and is a repeatable model given the fragmented aerospace supply base.
3. Electronic Technologies diversification.
The Electronic Technologies Group adds exposure to defense, space, and other high-reliability electronics markets, smoothing the cyclicality of commercial aerospace. Defense budgets and space activity provide a different demand driver than airline traffic, and these products often carry attractive margins given their specialized, mission-critical nature.
Risks worth tracking: HEICO trades at a premium valuation that embeds continued high growth, so any slowdown in commercial air traffic, a deep airline downturn, or a pause in its acquisition pipeline could compress the multiple. Commercial aerospace is cyclical and sensitive to recessions, fuel prices, and shocks like pandemics that ground fleets. Integration risk exists across many small acquisitions, and rising prices for targets could dilute returns. The Electronic Technologies Group depends partly on defense budgets, which can shift with politics. Dual-class share structure concentrates control with the founding family, which some investors view as a governance consideration.
Earnings and valuation (approximate, early 2026)
A simple financial snapshot. These are approximations and refresh quarterly; for current figures see Heico Corporation's investor relations page or your broker.
- Revenue (TTM): ~$4 billion
- Operating margin: ~22%
- Net income (TTM): ~$550 million
- P/E (TTM): ~55x
- Revenue growth: double-digit, aided by acquisitions
- Dividend yield: ~0.1% (token dividend; capital goes to acquisitions)
- Free cash flow: strong and consistent
HEICO commands one of the highest valuations in aerospace and defense, reflecting its consistent double-digit growth, high margins, recurring aftermarket demand, and a long record of value-accretive acquisitions. The premium multiple is the market's way of paying up for a proven compounder; it leaves limited room for execution missteps and has historically compressed mainly during broad market or aerospace downturns.
HEI's competitors
Aftermarket aerospace parts
Competes with OEMs like GE Aerospace, RTX (Pratt and Whitney, Collins), and Honeywell, which prefer to capture aftermarket parts revenue themselves, plus other PMA parts makers and MRO providers. HEICO's edge is its certified low-cost alternatives.
Defense and specialty electronics
The Electronic Technologies Group competes with a fragmented field of defense and space electronics suppliers and divisions of larger primes like RTX, L3Harris, and Honeywell for microwave, electro-optical, and high-reliability components.
Using HEI in a Walnut basket
The most useful question to ask about a single stock is rarely “will it go up?”. It's “does this fit a thesis I actually believe in, and how do I size it alongside other stocks that fit the same thesis?” That's what Walnut is built for.
Open the AI assistant on Walnut and describe a thesis (for example: “the AI infrastructure buildout”, “dividend growth large-caps”, “global semiconductors”) where HEI would naturally fit. The AI proposes 5 to 6 constituents with target weights, you review, and you can fund the basket through your broker once you're ready.
Build a basket around HEI with Walnut
Use Heico Corporation as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
What is HEI's ticker symbol?
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HEI, listed on the New York Stock Exchange. The company is HEICO Corporation. A second class of shares trades under HEI.A. HEICO is headquartered in Hollywood, Florida, and trades during US market hours at every major US brokerage.
What does HEICO do?
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HEICO makes FAA-approved replacement parts for jet engines and aircraft, sold as lower-cost alternatives to original-equipment parts, and repairs aerospace components. Its Electronic Technologies Group also makes specialized electronics for defense, space, and medical markets. Revenue is largely recurring, tied to fleet flight hours and aging aircraft.
Who are HEICO's main competitors?
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In aftermarket parts: OEMs like GE Aerospace, RTX, and Honeywell that prefer to keep parts revenue, plus other PMA parts and MRO providers. In specialty electronics: a fragmented set of defense and space electronics suppliers and divisions of larger primes such as L3Harris.
Why is HEICO stock so expensive?
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A P/E around 55x reflects consistent double-digit growth, high margins, recurring aftermarket demand as the global fleet ages, and a long record of value-creating acquisitions. The market pays a premium for proven compounders. The high multiple leaves little margin for error and has historically compressed mainly during aerospace or broad market downturns.
What is HEICO's P/E ratio?
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Approximately 55x trailing twelve months as of early 2026, among the highest in aerospace and defense. The premium reflects the durability of the aftermarket parts moat, high margins, and the serial acquisition model that has compounded earnings for decades.
Why does HEICO have two stock classes?
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HEICO has Class A shares (HEI.A) and common shares (HEI). The common shares typically carry more voting power, which helps the founding Mendelson family retain control, while Class A shares often trade at a slight discount. Both represent the same underlying business. Index funds and ETFs may hold either class depending on the index methodology.
Is HEICO a defense stock?
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Partly. HEICO is classified under Industrials, specifically aerospace and defense. Its Electronic Technologies Group serves defense and space customers, but the larger Flight Support Group is driven by commercial aviation aftermarket demand. So HEICO blends commercial aerospace and defense exposure rather than being a pure defense name.
Which ETFs have the most HEICO exposure?
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Aerospace and defense ETFs such as ITA and PPA hold HEICO, and broad funds like VOO, VTI, and SPY include it at smaller weights since it is an S&P 500 member. Mid- and large-cap industrial and quality-factor ETFs also carry it. Exact weights vary by fund and over time.
Is HEICO in the S&P 500?
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Yes. HEICO is a member of the S&P 500 and is held across passive index funds that track the benchmark. It is also commonly held in aerospace and defense and quality-compounder strategies given its long growth record.
Which thematic baskets typically include HEICO?
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Aerospace and defense baskets and quality-compounder or industrial-growth baskets on Walnut. HEICO fits a theme around the aging global aircraft fleet and rising aftermarket maintenance spend, and is often used as a high-quality industrial anchor alongside other aerospace names.
What is HEICO's market cap?
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Roughly in the tens of billions of dollars as of early 2026, placing it among the larger US aerospace and defense companies despite its niche focus. The market cap reflects decades of compounding growth through acquisitions and aftermarket demand.
Is HEICO a good stock to buy?
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Descriptive, not a recommendation. HEICO is a high-quality aerospace compounder with a durable aftermarket parts moat and a strong acquisition track record, but it trades at a premium valuation that embeds continued growth and is exposed to airline cyclicality. Whether it fits a portfolio depends on your goals, risk tolerance, and views on aerospace demand. Walnut is informational, not investment advice.
Walnut is informational, not investment advice. Financial figures on this page are approximations; always verify current numbers with Heico Corporation's investor relations page or your broker before making investment decisions.