On the October 4, 2026 episode of The Investor’s Podcast Network’s We Study Billionaires, titled “HEICO Vs. TransDigm: Whose Aerospace Monopoly Is Better?”, Stig Brodersen compared the debt levels of two aerospace parts makers with opposite capital structures. Kyle Grieve and Shawn O’Malley also appear. Figures below come from an editor’s transcript.
Brodersen said TransDigm Group (NYSE:TDG | TDG Price Prediction) has about $31 billion in net debt, with a net leverage ratio near 5.8 times. He put HEICO (NYSE:HEI) at $2.3 billion and 1.6 times. He said EBITDA covers interest expense 3 times at TransDigm and 11 times at HEICO.
How the Podcast’s Numbers Compare With the Filings
We checked each figure against the companies’ filings using TransDigm’s quarter ended June 30, 2026 and HEICO’s quarter ended July 31, 2026. Leverage and coverage use trailing four-quarter EBITDA.
| Metric | TDG: Podcast | TDG: Filings | HEI: Podcast | HEI: Filings |
|---|---|---|---|---|
| Net debt | $31 billion | $30.573 billion | $2.3 billion | $2.300 billion |
| Net debt/EBITDA | 5.8x | 6.1x | 1.6x | 1.6x |
| EBITDA/interest | 3x | 2.6x | 11x | 11.1x |
According to the filings, TransDigm’s net debt comes from $33.346 billion in total debt minus $2.773 billion in cash, against trailing EBITDA of $4.973 billion. HEICO’s comes from $2.541 billion in debt minus $240.959 million in cash, against EBITDA of $1.467 billion.
Brodersen’s HEICO figures match the filings exactly. His TransDigm net debt is close, but leverage is higher and interest coverage lower in the filings, showing a slightly worse debt position than described.
A $12.2 Billion Equity Gap the Episode Left Out
The segment never got to the most striking number in either filing. TransDigm reported total shareholder equity of negative $12.157 billion. HEICO reported positive equity of $4.948 billion.
Negative equity results from years of buybacks and special dividends funded with borrowed money exceeding retained earnings. TransDigm remains profitable and pays interest, but has chosen to send capital to shareholders while funding itself with debt. HEICO has built equity over time. The market values TransDigm at $61.01 billion versus $42.27 billion for HEICO.
Brodersen Praised TransDigm’s Deal Playbook
Brodersen cited TransDigm’s 2019 purchase of Esterline Technologies as an example of its acquisition strategy. He said TransDigm sold about a quarter of the business to sell off non-aerospace units, then applied price increases, cost reductions, and new business development. According to Brodersen, Esterline’s EBITDA margins doubled over a 5-year period.
One host called the debt figures “pretty scary”. The hosts still thought highly enough of the business to add it to their portfolio for a while: “We did add TransDigm to the intrinsic value portfolio for a period of time.” That tension between concerning debt and a business they admire runs through the whole discussion.
A Co-Host’s Natural Monopoly Argument
A co-host said that natural monopolies form when one company far outperforms competitors, citing TransDigm as an example. He mentioned a House Oversight Committee hearing where lawmakers struggled to explain TransDigm’s lack of competition, concluding that if government cannot step in in such businesses, it has limited power to constrain pricing. This is the co-host’s view.
What to Watch at Both Companies
Both companies sell proprietary aircraft parts, mostly aftermarket, and face high barriers to entry. TransDigm’s components are used on nearly all commercial and military aircraft in service. HEICO runs two segments and acquires niche businesses. TransDigm borrows heavily and returns cash aggressively; HEICO funds growth from earnings and keeps low debt. If aftermarket demand slows or refinancing costs rise, higher leverage poses greater risk.
Two things are worth tracking. First, whether TransDigm’s 2.6x interest coverage improves or slips. Second, whether HEICO starts buying companies faster, since its 1.6x leverage leaves plenty of room to borrow.