Rheinmetall (OTCMKTS:RNMBY – Get Free Report) and Mercury Systems (NASDAQ:MRCY – Get Free Report) are both aerospace companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.
Valuation and Earnings
This table compares Rheinmetall and Mercury Systems”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rheinmetall | $11.24 billion | 4.96 | $787.45 million | $2.13 | 112.45 |
| Mercury Systems | $912.02 million | 8.10 | -$37.90 million | ($0.24) | -512.71 |
Analyst Recommendations
This is a summary of current ratings and recommmendations for Rheinmetall and Mercury Systems, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rheinmetall | 0 | 1 | 8 | 0 | 2.89 |
| Mercury Systems | 2 | 3 | 3 | 2 | 2.50 |
Mercury Systems has a consensus target price of $91.00, suggesting a potential downside of 26.05%. Given Mercury Systems’ higher possible upside, analysts clearly believe Mercury Systems is more favorable than Rheinmetall.
Profitability
This table compares Rheinmetall and Mercury Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rheinmetall | 7.08% | 20.49% | 6.67% |
| Mercury Systems | -1.46% | 2.22% | 1.32% |
Institutional and Insider Ownership
96.0% of Mercury Systems shares are held by institutional investors. 1.4% of Mercury Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Volatility and Risk
Rheinmetall has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.
Summary
Rheinmetall beats Mercury Systems on 9 of the 15 factors compared between the two stocks.
About Rheinmetall
Rheinmetall AG provides mobility and security technologies worldwide. The company operates in five segments: Vehicle Systems, Weapon and Ammunition, Electronic Solutions, Sensors and Actuators, and Materials and Trade. The Vehicle Systems segment offers combat, logistics, support, and special vehicles, including armored tracked vehicles, CBRN protection systems, artillery, turret systems, and wheeled logistics and tactical vehicles. The Weapon and Ammunition segment provides firepower and protection solutions, such as weapons and munition, protection systems, propellants and international projects and services. The Electronic Solutions segment offers a chain of systems network, such as sensors, networking platforms, automated connected effectors for soldiers, and cyberspace protection solutions, and training and simulation solutions. Its products include air defense systems; soldier systems; command, control, and reconnaissance systems; fire control systems; sensors; and simulations for the army, air force, navy, and civil applications. The Sensors and Actuators segment provides a portfolio of products comprising exhaust gas recirculation systems; throttle valves, control dampers, and exhaust flaps for electromotors; solenoid valves; actuators and valve train systems; oil, water, and vacuum pumps for passenger cars, commercial vehicles, and light and heavy-duty off-road applications; and industrial solutions. The Materials and Trade segment develops system components for the basic motors, such as engine blocks, structural components, and cylinder heads; plain bearings, and bushes; and replacement parts. It also engages in the aftermarket activities. The company was formerly known as Rheinmetall Berlin AG and changed its name to Rheinmetall AG in 1996. Rheinmetall AG was founded in 1889 and is headquartered in Düsseldorf, Germany.
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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