Critical Comparison: Mercury Systems (MRCY) versus Triumph Group (TGI)

Mercury Systems (NASDAQ: MRCY) and Triumph Group (NYSE:TGI) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Insider & Institutional Ownership

96.7% of Mercury Systems shares are owned by institutional investors. Comparatively, 99.8% of Triumph Group shares are owned by institutional investors. 3.5% of Mercury Systems shares are owned by insiders. Comparatively, 2.8% of Triumph Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Mercury Systems and Triumph Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercury Systems 0 2 5 0 2.71
Triumph Group 3 6 3 0 2.00

Mercury Systems presently has a consensus target price of $42.20, indicating a potential downside of 10.27%. Triumph Group has a consensus target price of $30.64, indicating a potential upside of 9.81%. Given Triumph Group’s higher probable upside, analysts plainly believe Triumph Group is more favorable than Mercury Systems.

Risk & Volatility

Mercury Systems has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, Triumph Group has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500.

Profitability

This table compares Mercury Systems and Triumph Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mercury Systems 6.09% 4.87% 3.56%
Triumph Group -1.89% 28.96% 5.74%

Earnings & Valuation

This table compares Mercury Systems and Triumph Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mercury Systems $408.59 million 5.54 $77.23 million $0.58 81.09
Triumph Group $3.42 billion 0.40 $400.81 million ($1.32) -21.14

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

Dividends

Triumph Group pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Mercury Systems does not pay a dividend. Triumph Group pays out -12.1% of its earnings in the form of a dividend.

Summary

Triumph Group beats Mercury Systems on 9 of the 16 factors compared between the two stocks.

About Mercury Systems

Mercury Systems, Inc. is a commercial provider of secure processing subsystems designed and made in the United States. The Company’s solutions support a range of defense and intelligence programs. Its technologies include embedded processing modules and subsystems, radio frequency (RF) and microwave multi-function assemblies, as well as subsystems, and RF and microwave components. It designs and builds RF and microwave components and subsystems for the electronic warfare (EW), signals intelligence (SIGINT) and other communications requirements and applications. It offers analyst services and systems engineering support, consulting, maintenance and other support, testing and installation. It designs, markets and sells software and middleware environments for the development and execution of signal and image processing applications on a range of heterogeneous and multi-computing platforms. It also offers solutions in mission computing, safety-critical avionics and platform management.

About Triumph Group

Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls and distributes a portfolio of aircraft components, accessories, subassemblies and systems. The Company offers a range of products and services to the aerospace industry through three segments: Triumph Aerostructures Group, whose companies are engaged in the design, manufacture, assembly and integration of metallic and composite aerostructures and structural components for the aerospace original equipment manufacturer (OEM) market; Triumph Aerospace Systems Group, whose companies design, engineer and manufacture a range of build-to-print components, assemblies and systems also for the OEM market, and Triumph Aftermarket Services Group, whose companies serve aircraft fleets, such as commercial airlines, the United States military and cargo carriers, through the maintenance, repair and overhaul (MRO) of aircraft components and accessories manufactured by third parties.

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