Ducommun (NYSE:DCO – Get Free Report) and Mercury Systems (NASDAQ:MRCY – Get Free Report) are both aerospace companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.
Insider and Institutional Ownership
92.2% of Ducommun shares are held by institutional investors. Comparatively, 96.0% of Mercury Systems shares are held by institutional investors. 8.9% of Ducommun shares are held by insiders. Comparatively, 1.6% of Mercury Systems 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.
Profitability
This table compares Ducommun and Mercury Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ducommun | 4.45% | 7.61% | 4.54% |
| Mercury Systems | -7.33% | -0.77% | -0.47% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ducommun | 0 | 0 | 4 | 0 | 3.00 |
| Mercury Systems | 1 | 3 | 3 | 1 | 2.50 |
Ducommun presently has a consensus price target of $79.67, indicating a potential upside of 0.20%. Mercury Systems has a consensus price target of $49.57, indicating a potential downside of 5.25%. Given Ducommun’s stronger consensus rating and higher possible upside, analysts plainly believe Ducommun is more favorable than Mercury Systems.
Risk & Volatility
Ducommun has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.
Earnings & Valuation
This table compares Ducommun and Mercury Systems”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ducommun | $786.55 million | 1.50 | $31.50 million | $2.33 | 34.12 |
| Mercury Systems | $835.28 million | 3.74 | -$137.64 million | ($1.12) | -46.71 |
Ducommun has higher earnings, but lower revenue than Mercury Systems. Mercury Systems is trading at a lower price-to-earnings ratio than Ducommun, indicating that it is currently the more affordable of the two stocks.
Summary
Ducommun beats Mercury Systems on 11 of the 15 factors compared between the two stocks.
About Ducommun
Ducommun Incorporated provides engineering and manufacturing services for products and applications used primarily in the aerospace and defense, industrial, medical, and other industries in the United States. The company operates through two segments, Electronic Systems and Structural Systems. The Electronic Systems segment provides cable assemblies and interconnect systems; printed circuit board assemblies; electronic, electromechanical, and mechanical components and assemblies, as well as lightning diversion systems; and radar enclosures, aircraft avionics racks, shipboard communications and control enclosures, printed circuit board assemblies, cable assemblies, wire harnesses, interconnect systems, lightning diversion strips, surge suppressors, conformal shields, and other assemblies. The segment also supplies engineered products, including illuminated pushbutton switches and panels for aviation and test systems; microwave and millimeter switches and filters for radio frequency systems and test instrumentation; and motors and resolvers for motion control. In addition, this segment provides engineering expertise for aerospace system design, development, integration, and testing. The Structural Systems segment designs, engineers, and manufactures contoured aluminum, titanium, and Inconel aero structure components; structural assembly products, such as winglets, engine components, and fuselage structural panels; aerodynamic systems; and metal and composite bonded structures and assemblies comprising aircraft wing spoilers, large fuselage skins, rotor blades on rotary-wing aircraft and components, flight control surfaces, engine components, ammunition handling systems, and magnetic seals. It serves commercial aircraft, military fixed-wing aircraft, military and commercial rotary-wing aircraft, and space programs, as well as industrial, medical, and other end-use markets. The company was founded in 1849 and is headquartered in Santa Ana, California.
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.
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