Howmet Aerospace, ticker HWM, is the first name in Dylan Jovine’s Flight Royalty Three, the trio he pitches as companies “collecting on every plane in the sky.” Howmet does not build jet engines and it does not build aircraft. It forges the superalloy parts that live inside the hottest section of an engine, and it makes the specialty fasteners that hold airframes together. That upstream position, selling into nearly every major engine program on the planet, is exactly why it leads the list.
What Howmet Actually Does
Every modern jet engine has a hot section, the combustor and turbine where temperatures run well past the melting point of ordinary steel. The components there are forged from nickel, titanium, and cobalt-based superalloys, pressed into shape under enormous force and certified to survive tens of thousands of flight hours. A turbine blade made of a nickel superalloy has to resist creep, the slow stretching of metal under heat and centrifugal force that eventually ruins a part. Designing alloys that resist creep is a decades-long industrial capability, and certifying a new engine part can take years. That is why the industry has consolidated around a small group of suppliers rather than dozens of competitors, and why an engine maker cannot easily drop Howmet for a cheaper alternative.
Howmet is one of those few suppliers with the forging capacity, the metallurgy, and the certifications to do the job. When Pratt & Whitney, General Electric, or Rolls-Royce ships an engine, a company like Howmet sits upstream of that sale, and it keeps sitting there every time that engine comes back for maintenance. The company also operates a fastening systems business and a smaller wheels segment. The fasteners are the same story in miniature: a certified bolt or latch that cannot be swapped for a generic copy without recertifying the assembly. In aerospace, replacement parts are not optional, they are regulated, and that regulation is the economic moat the whole promo leans on.
The Numbers Behind the Pick
Howmet carries a market cap near $115 billion against roughly $3 billion of debt, an unusually clean balance sheet for an industrial of that size. The pitch points to expected earnings growth above 20 percent a year, and the shares traded near $289.18 in the data behind the presentation. Jovine’s open portfolio shows Howmet “up 109%” since August 2024, a mark measured from his own entry point rather than a return a new reader could rewind and capture today.
The aftermarket is the part of the business that makes the flight royalty idea work. A new engine sale is a lumpy, one-time event tied to aircraft production rates, but every engine already in service generates decades of scheduled shop visits, and each visit pulls replacement parts. Aftermarket components also carry fatter margins than original equipment, which is one reason investors prize suppliers with a large installed base of engines still flying. Our TransDigm stock breakdown covers the anchor of the same basket, and our aerospace and defense stocks guide maps the broader theme.
The caveat is valuation. At roughly 50 times forward earnings, the market has already priced in a good deal of that growth. This is a premium multiple for a supplier, even a dominant one, and it means the margin of safety is thinner than the “collecting on every plane” framing might imply.
The Flight Royalty Thesis
The core idea behind all three picks is that planes fly longer than their makers originally expected. Airlines keep jets in service for decades, and defense forces keep proven airframes flying while replacement programs run years behind schedule. Every hour those aircraft spend in the air wears down parts that have to be replaced on a regulator’s schedule, not the operator’s. A supplier of certified engine components collects a toll on that wear, which is the “flight royalty” Jovine is describing.
That logic holds up best when both halves of the market are strong. Commercial travel demand is high, and global defense spending is rising, so the thesis has two engines working at once. The weakness is that it cuts both ways: a travel slump or a deferral of maintenance stretches the replacement cycle, and a stock priced at 50 times earnings has little room for that kind of slowdown.
Howmet is the industrial backbone of the Flight Royalty Three and the least speculative of the three by business quality, even though it is far from cheap. The analyst behind the pitch built his own broker-dealer on Wall Street by age 24, and our Dylan Jovine profile covers that record.
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