I came across an interesting Stock Gumshoe breakdown of four aerospace stocks being pitched by Dylan Jovine's Behind the Markets as ways to collect a kind of "royalty" from the world's aircraft.

The thesis is simple...Airplanes are enormously expensive assets that stay in service for decades. Parts wear out. Regulations require replacements. And many of those parts can only come from a small number of certified suppliers. So instead of betting on who sells the next airplane, own the companies selling the critical pieces every airplane keeps needing.

TransDigm (TDG) - Probably the most interesting at today's valuation. TDG buys companies making specialized aerospace parts, often where there's little competition, and has enormous pricing power in the aftermarket. It's also extremely aggressive financially, roughly $30B in debt and a history of using leverage to fund acquisitions, buybacks and massive special dividends...last year's special dividend was $90/share. Yet after two relatively flat years, TDG is down to roughly 26X forward earnings with expected long-term earnings growth around 13%. That's unusually cheap by its own historical standards.

Howmet Aerospace (HWM) - The picks-and-shovels industrial play. Howmet makes superalloy turbine components that survive the hottest parts of jet engines, along with specialized aircraft fasteners. New planes need them and old planes undergoing engine overhauls may need them even more. Earnings are expected to grow 20%+ annually over the next few years, and Howmet carries only about $3B of debt. The catch is that investors already love it...you're paying around 50X forward earnings.

HEICO (HEI) - Think TransDigm without nearly as much financial aggression. HEICO buys aerospace suppliers and makes FAA-approved replacement parts that can give airlines a cheaper alternative to expensive OEM components. It's family controlled, carries only about $2B in long-term debt and has compounded spectacularly for decades. But again, you're paying for quality as HEICO trades above 50X forward earnings for roughly 14% expected long-term earnings growth. Compare that with TDG at ~26X for ~13%...that valuation gap is hard to ignore.

Mercury Systems (MRCY) - The speculative defense play. Mercury makes advanced computing and electronics that end up inside military aircraft, missiles, radar and autonomous systems. The company was a mess a few years ago until activists arrived. The CEO was replaced, management was gutted, R&D projects were cut, and capital allocation changed.

Now the turnaround appears to be working. Orders reportedly jumped 74% last quarter, and Mercury's standardized computing architecture could become increasingly important as drones and other weapons systems require more onboard computing. Unfortunately, Wall Street noticed and MRCY trades around 80X forward earnings. That's a lot of turnaround already priced in.

What's interesting is that there's no obvious "bad" company here. HWM probably has the strongest expected growth. HEI probably has the cleanest combination of quality and balance-sheet strength. MRCY might have the biggest upside surprise if the defense turnaround really takes off.

But TDG might actually be the most interesting stock today simply because of price. Paying ~26X earnings for ~13% growth looks a lot different from paying 50-80X for the others. The catch is that TDG's enormous debt makes that discount there for a reason.

Still, I like the larger thesis that everyone watches Boeing, Airbus, Lockheed and the other companies selling aircraft. But an airplane gets sold once and the parts keeping it in the sky get sold again and again for decades.