Head to Head Analysis: Hexcel Corporation (HXL) & Mercury Systems (MRCY)
Hexcel Corporation (NYSE: HXL) and Mercury Systems (NASDAQ:MRCY) are both mid-cap aerospace companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.
Insider & Institutional Ownership
96.8% of Hexcel Corporation shares are owned by institutional investors. Comparatively, 96.4% of Mercury Systems shares are owned by institutional investors. 2.1% of Hexcel Corporation 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 is a summary of recent ratings and recommmendations for Hexcel Corporation and Mercury Systems, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Hexcel Corporation presently has a consensus target price of $58.00, suggesting a potential downside of 3.51%. Mercury Systems has a consensus target price of $45.20, suggesting a potential downside of 13.08%. Given Hexcel Corporation’s higher possible upside, equities analysts clearly believe Hexcel Corporation is more favorable than Mercury Systems.
Hexcel Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 0.8%. Mercury Systems does not pay a dividend. Hexcel Corporation pays out 18.3% of its earnings in the form of a dividend.
Risk & Volatility
Hexcel Corporation has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500.
Valuation & Earnings
This table compares Hexcel Corporation and Mercury Systems’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hexcel Corporation||$1.95 billion||2.77||$442.00 million||$2.73||22.02|
|Mercury Systems||$408.59 million||6.12||$77.23 million||$0.58||89.66|
Hexcel Corporation has higher revenue and earnings than Mercury Systems. Hexcel 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.
This table compares Hexcel Corporation and Mercury Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Hexcel Corporation beats Mercury Systems on 11 of the 16 factors compared between the two stocks.
Hexcel Corporation Company Profile
Hexcel Corporation is a composites company. The Company develops, manufactures, and markets lightweight, structural materials, including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered honeycomb and structures, for use in Commercial Aerospace, Space and Defense and Industrial markets. It operates in two segments: Composite Materials and Engineered Products. The Composite Materials segment consists of its carbon fiber, specialty reinforcements, resins, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines. The Engineered Products segment consists of lightweight structures, molded components, engineered core and honeycomb products with added functionality. Its products are used in a range of end applications, such as commercial and military aircraft, space launch vehicles and satellites, wind turbine blades, automotive, and recreational products.
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.
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