Mercury Systems (NASDAQ:MRCY – Get Free Report) and Spirit Aerosystems (NYSE:SPR – Get Free Report) are both mid-cap aerospace companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.
Profitability
This table compares Mercury Systems and Spirit Aerosystems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Mercury Systems | -7.33% | -0.77% | -0.47% |
| Spirit Aerosystems | -34.81% | N/A | -24.58% |
Analyst Recommendations
This is a summary of recent ratings and target prices for Mercury Systems and Spirit Aerosystems, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Mercury Systems | 1 | 3 | 3 | 1 | 2.50 |
| Spirit Aerosystems | 0 | 9 | 0 | 1 | 2.20 |
Institutional & Insider Ownership
96.0% of Mercury Systems shares are held by institutional investors. Comparatively, 93.6% of Spirit Aerosystems shares are held by institutional investors. 1.6% of Mercury Systems shares are held by insiders. Comparatively, 0.9% of Spirit Aerosystems shares are held 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.
Valuation & Earnings
This table compares Mercury Systems and Spirit Aerosystems”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Mercury Systems | $835.28 million | 3.68 | -$137.64 million | ($1.12) | -45.94 |
| Spirit Aerosystems | $6.32 billion | 0.72 | -$2.14 billion | ($18.22) | -2.13 |
Mercury Systems has higher earnings, but lower revenue than Spirit Aerosystems. Mercury Systems is trading at a lower price-to-earnings ratio than Spirit Aerosystems, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Mercury Systems has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Spirit Aerosystems has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500.
Summary
Mercury Systems beats Spirit Aerosystems on 10 of the 14 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 Spirit Aerosystems
Spirit AeroSystems Holdings, Inc. engages in the design, engineering, manufacture, and marketing of commercial aerostructures worldwide. It operates through three segments: Commercial, Defense & Space, and Aftermarket. The Commercial segment offers forward, mid, and rear fuselage sections and systems, floor beams, nacelles, struts/pylons, horizontal and vertical stabilizers, flaps and slats flight control surfaces, wing structures, and wing systems. This segment primarily serves commercial and business/regional jet programs. The Defense & Space segment engages in the fabrication, bonding, assembly, testing, tooling, processing, engineering analysis, and training on fuselage, strut, nacelle, and wing aerostructures; provision of missiles and hypersonics solutions, such as solid rocket motor throats, nozzles, re-entry vehicle thermal protections systems; forward cockpit and cabin, and fuselage work on rotorcraft aerostructures; and classified programs. This segment primarily serves U.S. Government defense programs. The Aftermarket segment provides maintenance, repair, and overhaul services; fuselage, strut, nacelle, and wing aerostructures spare parts; repair services for radome, flight control surfaces, and nacelles; rotable assets trading and leasing; and engineering services. This segment primarily serves both commercial and defense and space programs. The company was formerly known as Mid-Western Aircraft Systems Holdings, Inc. Spirit AeroSystems Holdings, Inc. was founded in 1927 and is headquartered in Wichita, Kansas.
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