Head to Head Contrast: Woodward (NASDAQ:WWD) & Mercury Systems (NASDAQ:MRCY)

Woodward (NASDAQ:WWD) and Mercury Systems (NASDAQ:MRCY) are both aerospace companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Profitability

This table compares Woodward and Mercury Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Woodward	11.32%	16.57%	8.53%
Mercury Systems	-4.16%	0.58%	0.35%

Earnings and Valuation

This table compares Woodward 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
Woodward	$3.32 billion	4.76	$372.97 million	$6.32	41.74
Mercury Systems	$912.02 million	5.11	-$37.90 million	($0.66)	-117.58

Woodward has higher revenue and earnings than Mercury Systems. Mercury Systems is trading at a lower price-to-earnings ratio than Woodward, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Woodward and Mercury Systems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Woodward	0	4	8	0	2.67
Mercury Systems	2	3	4	2	2.55

Woodward presently has a consensus target price of $268.67, suggesting a potential upside of 1.85%. Mercury Systems has a consensus target price of $73.89, suggesting a potential downside of 4.78%. Given Woodward’s stronger consensus rating and higher probable upside, research analysts clearly believe Woodward is more favorable than Mercury Systems.

Risk & Volatility

Woodward has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Insider & Institutional Ownership

81.2% of Woodward shares are held by institutional investors. Comparatively, 96.0% of Mercury Systems shares are held by institutional investors. 0.8% of Woodward shares are held by company insiders. Comparatively, 1.4% of Mercury Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Woodward beats Mercury Systems on 11 of the 15 factors compared between the two stocks.

About Woodward

Woodward, Inc. designs, manufactures, and services control solutions for the aerospace and industrial markets worldwide. The company operates in two segments, Aerospace and Industrial. The Aerospace segment provides fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles, and flight deck controls, actuators, servocontrols, motors, and sensors for aircraft. These products are used on commercial and private aircraft and rotorcraft, as well as on military fixed-wing aircraft and rotorcraft, guided weapons, and other defense systems. It also provides aftermarket maintenance, repair and overhaul, and other services to commercial airlines, repair facilities, military depots, third party repair shops, and other end users. This segment sells its products to original equipment manufacturers (OEMs), tier-one suppliers, and contractors, as well as through aftermarket sales of components, such as provisioning spares and replacements. The Industrial segment offers actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, speed controls, electronics and software, and sensors. These products are used on industrial gas turbines, steam turbines, compressors, and reciprocating engines. This segment sells its aftermarket products, and other related services to OEMs through an independent network of distributors, as well as directly to end users. The company was founded in 1870 and is headquartered in Fort Collins, Colorado.

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.