Mercury Systems (NASDAQ:MRCY – Get Free Report) and CAE (NYSE:CAE – Get Free Report) are both aerospace companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.
Institutional & Insider Ownership
96.0% of Mercury Systems shares are held by institutional investors. Comparatively, 67.4% of CAE shares are held by institutional investors. 1.4% of Mercury Systems shares are held by company insiders. Comparatively, 18.3% of CAE shares are held 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.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Mercury Systems and CAE, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Mercury Systems | 2 | 3 | 4 | 1 | 2.40 |
| CAE | 0 | 4 | 5 | 2 | 2.82 |
Profitability
This table compares Mercury Systems and CAE’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Mercury Systems | -3.23% | 1.28% | 0.76% |
| CAE | 8.98% | 7.60% | 3.41% |
Valuation and Earnings
This table compares Mercury Systems and CAE”s top-line 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 | 5.55 | -$37.90 million | ($0.53) | -159.17 |
| CAE | $3.28 billion | 3.19 | $291.29 million | $0.97 | 33.55 |
CAE has higher revenue and earnings than Mercury Systems. Mercury Systems is trading at a lower price-to-earnings ratio than CAE, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Mercury Systems has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, CAE has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.
Summary
CAE beats Mercury Systems on 13 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 CAE
CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and Rest of the Americas. It operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as aircraft flight operations solutions. The Defense and Security segment operates as a training and simulation provider that delivers platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.
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