Tuesday, Aug 6th 2019

Transdigm Q3 2019 Earnings: Blowout Results and a 6% Dividend


On Tuesday morning, Transdigm spiked +14% after reporting a tremendous quarter and a special dividend.

Aerospace parts manufacturer Transdigm surged +14% on Tuesday after announcing blowout earnings alongside an $30/share special dividend.

On Transdigm's last 30 day trading average, this payout would imply a yield of roughly 6% - an incredible yield for a company growing as healthily as Transdigm.

The Numbers

Driven by steadily growing air travel trends and longer aircraft replacement cycles, Transdigm's core business delivered results that handily exceeded Wall Street expectations, surpassing both revenue and profit estimates by 5% and 15%, respectively.

The company also delivered a new fiscal year financial outlook that surpassed analyst expectations by 2% and 6% on revenue and profits.

The Explanation

These impressive results were driven both by strong performance at the core underlying business as well as better-than-expected progress in integrating Esterline, a components manufacturer that Transdigm acquired earlier this year.

This integration process also partially helped fund the special dividend, as it drove Transdigm's recent $920 million sale of an interconnect solutions business that had been embedded within Esterline.

The Takeaway

Over the past few years, Transdigm has gotten in the habit of paying out special dividends like the one announced this quarter every one or two years.

We believe this practice nicely highlights the often-overlooked cash flow characteristics of Transdigm and many other Titan companies.

In other words, while it's easy to mentally bucket Transdigm and other Titan companies as simply "growth businesses," they also tend to be cash flow / income-generating machines that can deliver higher yields than bonds and savings accounts while bearing very attractive long-term risk profiles.

As of this writing, TDG was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
Back to Research ↗

Learn with titan

Investment articles and resources

Become the smartest investor you've ever been through straightforward, easy-to-read investment articles.

What Is Dividend Yield & How Do You Calculate It?

How to Invest in Dividend Stocks

What Is Dividend Per Share and How Is It Calculated?

What Is a Dividend Reinvestment Plan? Drip Investing Overview

Let's Get Started

Ready to become a client?

Create an account with us in two minutes.

Or scan to get the app

We're building the best investment platform, ever

Titan Global Capital Management USA, Inc ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). By using this website, you accept our Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.

Refer to Titan's Program Brochure for more information. Certain investments are not suitable for all investors. Before investing, consider your investment objectives and Titan’s fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Brokerage services are provided to Titan Clients by Titan Global Technologies LLC and Apex Clearing Corporation, both registered broker-dealers and members FINRA/SIPC. For more information, see our disclosures. Contact: 508 LaGuardia Place NY, NY 10012. Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice. Check the background of these firms on FINRA's BrokerCheck.

© Copyright 2022 Titan Global Capital Management, Inc. All Rights Reserved.