Mercury Systems (NASDAQ: MRCY) and Exelis (NYSE:XLS) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitabiliy, risk and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations for Mercury Systems and Exelis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercury Systems 0 2 6 0 2.75
Exelis 0 0 0 0 N/A

Mercury Systems presently has a consensus target price of $42.20, suggesting a potential downside of 4.95%. Given Mercury Systems’ higher probable upside, equities research analysts plainly believe Mercury Systems is more favorable than Exelis.

Valuation and Earnings

This table compares Mercury Systems and Exelis’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mercury Systems $408.59 million 5.02 $73.56 million $0.58 76.55
Exelis N/A N/A N/A N/A N/A

Mercury Systems has higher revenue and earnings than Exelis.

Profitability

This table compares Mercury Systems and Exelis’ 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%
Exelis 7.52% 18.51% 4.87%

Institutional & Insider Ownership

98.7% of Mercury Systems shares are owned by institutional investors. 4.3% of Mercury Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Mercury Systems beats Exelis on 5 of the 8 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.

Exelis Company Profile

Exelis Inc. (Exelis) is a diversified aerospace, defense, information and services company. The Company delivers mission-critical solutions to military, government and commercial customers in the United States and globally. It operates in two segments: Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) Electronics and Systems, and Information and Technical Services. Its C4ISR Electronics and Systems segment provides engineered systems and solutions, including: ISR systems; integrated electronic warfare systems; radar and sonar systems; electronic attack and release systems; communications solutions; space systems, and composite aerostructures. The Company’s Information and Technical Services segment provides a range of service solutions: systems integration; network design and development; air traffic management; cyber; intelligence; advanced engineering, and space launch and range-support.

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