If You Don’t Invest In TransDigm Group, You Are Leaving Money On The Table

TDG: TransDigm logo
TDG
TransDigm

It yields more than your bank account, shrugs off market meltdowns, and is built for the new economic regime. Guess who we are talking about? It is TransDigm Group (NYSE:TDG). Still ignoring it? We get it. It isn’t a shiny tech name or a new AI highflyer. It is boring. But this is exactly the tactical mistake you want to avoid if you want to compound your money.

Avoiding large swings is fundamental to compounding wealth. The High-Quality portfoliowhich is geared to reduce volatility while offering upside that compounds, has outperformed the S&P 500 and achieved returns greater than 91% since inception.

Let’s see if you still find TDG stock boring after what we’ll tell you.

You’ve heard enough about tech stocks that swing like trapeze artists. But what if there’s a stock that gives you tech-like returns without the tech-like tantrums? One that pays you a 5.5% dividend – right now – and has the firepower to grow that payout year after year?

Meet the defense stock that quietly crushes expectations – TDG

Your Bank Isn’t Paying You This

At 5.5%, this dividend beats most savings accounts, money markets, and even Treasuries. But here’s the kicker – this dividend isn’t a “set-it-and-forget-it” yield. It’s got fuel behind it.

  • Revenue growth: 16.9% in the last 12 months, and 18.7% last 3-year average
  • Margins: 46% operating margin, 22% net margin, and 23% operating cash flow margin

So what does this mean? This isn’t just a dividend play – it’s a cash machine with room to grow. With fat margins and rapid topline growth, dividends are going to grow too. And that means that yields could go up, or maintain if stock price appreciates. Either way – you win! You’ve got an appreciating income year after year.

But Wait – It’s Not Just About Yield

Plenty of income stocks deliver fat dividends. Few deliver them alongside stability and capital gains.

  • This defense stock has returned an annualized 38% over the last 5 years.
  • And here’s the fun part: no crazy 50%+ drawdowns – except during the COVID crash when everything tanked.

Compare that to your tech darlings. Nvidia: -62% in 2022, Meta: -75% drawdown peak-to-trough, and Tesla – well, Let’s not even go there

With this defense play, you’re compounding quietly and consistently. And guess what – with its fat margins, strong cash flow, and a DE ratio of 30%, this stock has plenty of room to absorb higher interest costs as debts get refinanced at higher yields in coming years. This means that the risk to dividend growth is low.

Built for Chaos – And the Next Economic Regime

Think defense stocks are boring? Think again.

Tariffs are back. U.S.-China tensions are escalating. The new industrial policy wave (call it re-shoring, de-risking, or “Make America Build Again”) is a green light for defense spending.

Defense companies aren’t just protected – they’re positioned to thrive.

And TDG has been iron-clad during market crises in the past.

  • 2018 Market Correction: Stock fell only 16% from its peak in October while big names crashed bad, and for the full year, returned 24% vs -4.5% for S&P – a massive outperformance
  • 2022 Inflation Shock: Stayed in the green zone for the full year, at +1.7%, while S&P crashed more than 18%
  • 2025 Tariff Mayhem: It’s outperforming yet again, beating S&P by almost 15%.

But as the saying goes – never put all your eggs in one basket. The Trefis High Quality (HQ) Portfolio is designed to diversify stock-specific risk while providing exposure to the upside. With a collection of 30 stocks, it has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics