Critical Contrast: United Technologies (UTX) & Mercury Systems (MRCY)
United Technologies (NYSE: UTX) and Mercury Systems (NASDAQ:MRCY) are both mid-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.
Earnings & Valuation
This table compares United Technologies and Mercury Systems’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Technologies||$57.24 billion||1.84||$5.06 billion||$6.46||20.37|
|Mercury Systems||$408.59 million||6.03||$24.87 million||$0.86||59.42|
Institutional and Insider Ownership
80.1% of United Technologies shares are owned by institutional investors. Comparatively, 96.3% of Mercury Systems shares are owned by institutional investors. 0.2% of United Technologies shares are owned by company insiders. Comparatively, 3.5% of Mercury Systems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares United Technologies and Mercury Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
United Technologies has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for United Technologies and Mercury Systems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
United Technologies presently has a consensus target price of $126.31, suggesting a potential downside of 5.38%. Mercury Systems has a consensus target price of $50.20, suggesting a potential downside of 1.76%. Given Mercury Systems’ stronger consensus rating and higher possible upside, analysts plainly believe Mercury Systems is more favorable than United Technologies.
United Technologies pays an annual dividend of $2.80 per share and has a dividend yield of 2.1%. Mercury Systems does not pay a dividend. United Technologies pays out 43.3% of its earnings in the form of a dividend. Mercury Systems has raised its dividend for 6 consecutive years.
Mercury Systems beats United Technologies on 9 of the 17 factors compared between the two stocks.
About United Technologies
United Technologies Corporation is engaged in providing high technology products and services to the building systems and aerospace industries around the world. The Company operates through four segments: Otis; UTC Climate, Controls & Security; Pratt & Whitney, and UTC Aerospace Systems. Otis operates as an elevator and escalator manufacturing, installation and service company. UTC Climate, Controls & Security segment is engaged in providing heating, ventilating, air conditioning (HVAC) and refrigeration solutions. The Pratt & Whitney segment supplies aircraft engines for the commercial, military, business jet and general aviation markets. Pratt & Whitney segment provides fleet management services and aftermarket maintenance, repair and overhaul services. The UTC Aerospace Systems segment provides aerospace products and aftermarket service solutions for aircraft manufacturers, airlines, regional, business and general aviation markets, military, space and undersea operations.
About Mercury Systems
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.
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