Forget Airline Stocks, Buy Aerospace Suppliers Instead
The commercial aviation industry has obviously taken a major hit from the COVID-19 pandemic and it appears that getting back to 2019 levels is going to be a multi-year event. That said, every stock has its price, and it's no surprise that value investors have been buying airline stocks with an aim of playing the recovery. However, from a historical perspective, it makes more sense to buy the commercial aviation suppliers, like Raytheon Technologies (NYSE: RTX), Honeywell (NYSE: HON), or Heico (NYSE: HEI). Here's why.
Companies exist to generate returns for equity investors, but first they are obliged to pay back debtholders. That's a key point to understand with airline stocks, because historically speaking, the airline industry has been good for bondholders, but until recently, not so good for equity holders.
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Source Fool.com
