Financial Review: Mercury Systems (NASDAQ:MRCY) versus Curtiss-Wright (NYSE:CW)

Mercury Systems (NASDAQ:MRCY) and Curtiss-Wright (NYSE:CW) are both aerospace companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Valuation & Earnings

This table compares Mercury Systems and Curtiss-Wright”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercury Systems	$912.02 million	6.24	-$37.90 million	($0.24)	-394.98
Curtiss-Wright	$3.50 billion	7.57	$484.23 million	$13.65	52.52

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

Volatility and Risk

Mercury Systems has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Curtiss-Wright has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Institutional and Insider Ownership

96.0% of Mercury Systems shares are owned by institutional investors. Comparatively, 82.7% of Curtiss-Wright shares are owned by institutional investors. 1.4% of Mercury Systems shares are owned by insiders. Comparatively, 0.5% of Curtiss-Wright shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Mercury Systems and Curtiss-Wright’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercury Systems	-1.46%	2.22%	1.32%
Curtiss-Wright	14.17%	20.00%	10.01%

Analyst Recommendations

This is a summary of recent ratings for Mercury Systems and Curtiss-Wright, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercury Systems	2	3	3	2	2.50
Curtiss-Wright	0	3	4	0	2.57

Mercury Systems presently has a consensus target price of $89.89, suggesting a potential downside of 5.18%. Curtiss-Wright has a consensus target price of $746.67, suggesting a potential upside of 4.15%. Given Curtiss-Wright’s stronger consensus rating and higher probable upside, analysts clearly believe Curtiss-Wright is more favorable than Mercury Systems.

Summary

Curtiss-Wright beats Mercury Systems on 12 of the 15 factors compared between the two stocks.

About Mercury Systems

Mercury Systems, Inc., a technology company, manufactures and sells components, products, modules, and subsystems for aerospace and defense industries in the United States, Europe, and the Asia Pacific. Its products and solutions are deployed in approximately 300 programs with 25 defense contractors and commercial aviation customers. The company offers components, including power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, monolithic microwave integrated circuits, and memory and storage devices; modules and sub-assemblies, such as embedded processing boards, switched fabrics and boards, digital receivers, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners, and transceivers, as well as graphics and video boards; and integrated subsystems. It also designs and develops digital radio frequency memory units for various modern electronic warfare applications; radar environment simulation and test systems for defense and intelligence applications; and signals intelligence payloads and EO/IR technologies for small UAV platforms, as well as onboard UAV processor systems for real-time wide area motion imagery. The company was formerly known as Mercury Computer Systems, Inc. and changed its name to Mercury Systems, Inc. in November 2012. The company was incorporated in 1981 and is headquartered in Andover, Massachusetts.

About Curtiss-Wright

Curtiss-Wright Corporation, together with its subsidiaries, provides engineered products, solutions, and services mainly to aerospace and defense, commercial power, process, and industrial markets worldwide. It operates through three segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. The Aerospace & Industrial segment offers industrial and specialty vehicle products, such as power management electronics, traction inverters, transmission shifters, and control systems; sensors, controls, and electro-mechanical actuation components used on commercial and military aircraft; and surface technology services including shot peening, laser peening, and engineered coatings. The Defense Electronics segment provides commercial off-the-shelf embedded computing board-level modules and processing equipment, data acquisition and flight test instrumentation equipment, integrated subsystems, instrumentation and control systems, tactical communications solutions; and electronic stabilization products, and weapons handling systems; avionics and electronics; flight test equipment; and aircraft data management solutions. The Naval & Power segment offers main coolant pumps, power-dense compact motors, generators, steam turbines, valves, and secondary propulsion systems; energy absorbers, retractable hook cable systems, net-stanchion systems and mobile systems to support fixed land-based arresting systems; hardware, valves, fastening systems, specialized containment doors, airlock hatches, and spent fuel management products; reactor coolant pumps and control rod drive mechanisms for commercial nuclear power plants, as well as various nuclear reactor technologies. This segment furnishes severe-service valve technologies and services, heat exchanger repair, and piping test and isolation products, and offers ship repair and maintenance for the U.S. navy. Curtiss-Wright Corporation was incorporated in 1929 and is headquartered in Davidson, North Carolina.