Mercury Systems (NASDAQ: MRCY) and Esterline Technologies Corporation (NYSE:ESL) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Mercury Systems and Esterline Technologies Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercury Systems 0 2 5 0 2.71
Esterline Technologies Corporation 1 4 1 0 2.00

Mercury Systems presently has a consensus target price of $45.20, indicating a potential downside of 14.12%. Esterline Technologies Corporation has a consensus target price of $92.67, indicating a potential downside of 0.36%. Given Esterline Technologies Corporation’s higher probable upside, analysts clearly believe Esterline Technologies Corporation is more favorable than Mercury Systems.

Volatility and Risk

Mercury Systems has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, Esterline Technologies Corporation has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Institutional & Insider Ownership

96.4% of Mercury Systems shares are owned by institutional investors. Comparatively, 92.2% of Esterline Technologies Corporation shares are owned by institutional investors. 3.5% of Mercury Systems shares are owned by insiders. Comparatively, 1.4% of Esterline Technologies Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Mercury Systems and Esterline Technologies Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mercury Systems $408.59 million 6.20 $77.23 million $0.58 90.74
Esterline Technologies Corporation $2.01 billion 1.39 $312.43 million $4.48 20.76

Esterline Technologies Corporation has higher revenue and earnings than Mercury Systems. Esterline Technologies Corporation is trading at a lower price-to-earnings ratio than Mercury Systems, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mercury Systems and Esterline Technologies Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mercury Systems 6.09% 4.87% 3.56%
Esterline Technologies Corporation 6.65% 9.18% 5.06%

Summary

Esterline Technologies Corporation beats Mercury Systems on 8 of the 14 factors compared between the two stocks.

Mercury Systems Company Profile

Mercury Systems, Inc. is a commercial provider of secure processing subsystems designed and made in the United States. The Company’s solutions support a range of defense and intelligence programs. Its technologies include embedded processing modules and subsystems, radio frequency (RF) and microwave multi-function assemblies, as well as subsystems, and RF and microwave components. It designs and builds RF and microwave components and subsystems for the electronic warfare (EW), signals intelligence (SIGINT) and other communications requirements and applications. It offers analyst services and systems engineering support, consulting, maintenance and other support, testing and installation. It designs, markets and sells software and middleware environments for the development and execution of signal and image processing applications on a range of heterogeneous and multi-computing platforms. It also offers solutions in mission computing, safety-critical avionics and platform management.

Esterline Technologies Corporation Company Profile

Esterline Technologies Corporation is a specialized manufacturing company. The Company designs, manufactures and markets engineered products and systems for application within the industries it serves. The Company operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. The Company serves aerospace and defense customers. The Company’s Avionics & Controls business segment includes avionics systems, control and communication systems, and interface technologies capabilities. The Company’s Sensors & Systems business segment includes power systems, connection technologies and advanced sensors capabilities. The Company’s Advanced Materials business segment includes engineered materials and defense technologies capabilities. The Company designs and manufactures ruggedized military personal communication equipment, primarily headsets, handsets and field communications.

Receive News & Stock Ratings for Mercury Systems Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Mercury Systems Inc and related stocks with our FREE daily email newsletter.