1 Growing Compounder Stock Dominating its Industry

When investors think about aviation, they usually go straight to the big names like Boeing (NYSE: BA) or Airbus.

But there’s a smarter way to play the same trend.

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One that doesn’t depend on ticket prices, aircraft orders, or airline profitability. And right now it’s an A or Strong Buy according to our Zen Ratings system. 

Here’s why one SINGLE pick could be the perfect “tollbooth” style business to play the long term trend of growing air travel.

And be sure to read until the end, because we have MORE ideas at the end.

Here’s the stock…

Woodward (WWD).

Not familiar? Let’s bring you up to speed.

The Parts Inside the Engine

Woodward doesn’t build planes.

It builds the systems that make aircraft engines work: things like fuel systems, control systems, and precision components that regulate how engines perform.

These parts are deeply embedded into aircraft platforms. Once they’re designed in, they tend to stay there for decades.

And that’s where the business model gets interesting.

It Gets Paid Every Time Planes Fly

Airplanes don’t just generate revenue when they’re sold.

They generate revenue every time they’re used.

As planes fly, components wear down. Systems need maintenance. Parts need to be replaced. And those replacements often come from the same suppliers that were designed into the original system.

That’s called the aftermarket: and it’s where Woodward makes some of its best money.

Compared to original equipment (selling parts for new aircraft), aftermarket revenue is:

• Higher margin
• More predictable
• Tied to flight hours, not production cycles

So even if Boeing or Airbus slows production, Woodward can still benefit as long as planes are flying.

And right now, they are.

A Simple Tailwind: More Flights, More Revenue

Global air travel continues to grow.

Consider:

• Travel is a deep human desire, but it’s also expensive and discretionary. Thus, as the world gets wealthier and the cost of necessities declines in real terms, people devote a larger share of their growing wallet to travel. 
• As a result, airline flight miles have grown almost 5% per year since 1990. Despite this long period of growth, only 11% of the global population fly each year, only 4% fly internationally, and 80% have never flown at all. 
• These data points support industry growth for decades to come. 

Between rising middle-class demand, international travel recovery, and constrained aircraft supply, existing fleets are already being used more heavily than expected.

That matters.

More flight hours = more maintenance

More maintenance = more replacement parts

More replacement parts = more revenue for suppliers like Woodward

It’s a simple chain … but a powerful one.

More Than Just Commercial Aviation

While commercial aerospace is the core driver, Woodward also has exposure to:

• Defense systems (missiles, military aircraft)
• Energy and industrial systems (turbines, power generation)

That adds another layer of stability.

Defense spending is rising globally, and energy infrastructure continues to require precision control systems … areas where Woodward already operates.

So you’re getting a broader industrial and defense footprint as well.

Why It’s Not Just Another Cyclical

At first glance, Woodward looks like a typical aerospace supplier … the kind of stock that rises and falls with aircraft production cycles.

But that view misses the shift.

The real driver is aftermarket revenue tied to utilization, not just new builds.

That makes the business more resilient and more predictable than many investors assume.

… Because every additional hour a plane flies increases demand for the systems Woodward supplies.

That’s one reason the stock doesn’t just score high in Growth, but in Safety as well:

Our Safety model weighs factors like stock price stability, receivables standard deviation, and earnings estimate standard deviation.

We go into why we consider safety so important here.

The Bottom Line

Woodward sits in a valuable position inside the aviation ecosystem: supplying the components that keep aircraft running, and getting paid as long as they do.

Sometimes the best way to play a trend isn’t to bet on the obvious names. It’s to find the company quietly collecting revenue behind the scenes. That’s why I’m keeping a close eye on WWD. You can add it to your watchlist here. 

By the way … there are a few defense industry stocks scoring even higher than WWD. Click here to see what they are.

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