What “Advanced Coating” Actually Means
In a jet engine, “advanced coating” usually points to the thin ceramic layer called a thermal-barrier coating. A modern turbofan burns fuel at temperatures that would soften or melt the very metal parts it pushes air through. The coating is what keeps those parts alive. Sprayed onto turbine blades, disks, and combustion components, it reflects heat away from the underlying metal and buys each part thousands of extra flight hours before it has to be replaced.
The coating only matters because of the metal underneath it. That metal is a superalloy, a nickel- or cobalt-based material engineered to hold its strength at extreme heat. Coating and superalloy work as a pair. The superalloy provides the mechanical backbone, and the thermal-barrier coating keeps it cool enough to do its job for years. The combination is the hardest part of an engine to make and to replace, which is exactly why it carries so much pricing power.
How Howmet Sits in the Coating Chain
Howmet Aerospace (NYSE: HWM) is the name Dylan Jovine lists as the first of his Flight Royalty Three. Howmet does not sell coatings as a standalone product line the way a specialty chemical firm might. It forges the superalloy parts those coatings get applied to. The hottest section of a jet engine, the high-pressure turbine and everything around it, is built on Howmet components: turbine airfoils, disks, and structural castings, plus a specialty airframe fastener business on the side.
The scale is significant. Howmet carries roughly a $115 billion market capitalization against about $3 billion in debt, and analysts expect earnings growth above 20% a year. That growth is not cheap. The stock trades near 50 times forward earnings and recently sat around $289.18 per share. Jovine’s open portfolio shows the position up 109% since August 2024, a mark measured from his own entry date rather than a return a new buyer would lock in today.
Why the Hot Section Is the Moat
The reason Howmet keeps showing up in aerospace pitches is straightforward. The hot section is not a part an airline can shop around for. Engines are certified by regulators, and every component inside them has to match the original design. When a plane flies longer than planned, as much of today’s commercial fleet is doing, the hottest parts wear out first and have to be replaced with certified parts. That is the aftermarket tailwind behind the whole Flight Royalty pitch: older planes fly longer, and regulation-mandated replacement parts keep flowing.
Howmet sits at the center of that flow because it makes parts that cannot be skipped. For the full picture of how this fits the three-name basket, our aerospace and defense stocks explainer walks through TransDigm, Howmet, HEICO, and Mercury Systems side by side. The defense half of the argument, where Howmet’s military engine work lives, gets its own treatment in our defense stocks to buy breakdown.
The Aftermarket Angle
Coating and superalloy technology also explains the pricing power that runs through this entire presentation. A thermal-barrier coating lets an engine run hotter, and hotter engines burn fuel more efficiently. Fuel efficiency is worth real money to an airline on every flight. A part that makes a jet burn less fuel can be priced by the value it delivers rather than the cost of the metal and labor that went into it. That is the same value-pricing logic Jovine attributes to TransDigm, the featured free pick in this same presentation, and it shows up at Howmet through an identical mechanism: customers pay for the hours of safe, efficient flight a part enables, not for the ingot that went into it.
For readers following the broader defense angle, our defense stocks explainer covers how military budgets translate into contracts for names like these. The same hot-section technology that powers commercial fleets also powers the engines on fighter jets and transports, which is why Howmet shows up on both sides of the Flight Royalty thesis.
The economics flow through to maintenance, not just replacement. Airlines plan engine overhauls years in advance, and every shop visit is a chance to install fresh hot-section parts. Because those parts are locked into the engine’s certification, the operator is not really choosing between suppliers. It is choosing between the certified part and a grounded aircraft. That single-sourcing is the quiet force behind the margins Howmet and its peers report, and it is why the aftermarket has held up better than the new-aircraft order book whenever deliveries have slipped. For an investor, the takeaway is that coating and superalloy technology is not a commodity input. It is the moat itself, the reason a part that looks small in a catalog carries outsize pricing power.
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