Head to Head Comparison: Mercury Systems (MRCY) vs. Hubbell (HUBB)

Hubbell (NYSE: HUBB) and Mercury Systems (NASDAQ:MRCY) are both mid-cap industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Volatility & Risk

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Hubbell has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Hubbell 6.63% 20.16% 8.97%
Mercury Systems 9.61% 6.32% 5.34%

Dividends

Hubbell pays an annual dividend of $3.08 per share and has a dividend yield of 2.5%. Mercury Systems does not pay a dividend. Hubbell pays out 51.9% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Hubbell and Mercury Systems’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hubbell $3.67 billion 1.81 $243.10 million $5.93 20.39
Mercury Systems $408.59 million 5.31 $24.87 million $0.95 47.35

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

Analyst Ratings

This is a summary of recent recommendations for Hubbell and Mercury Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hubbell 0 1 5 0 2.83
Mercury Systems 0 2 4 0 2.67

Hubbell presently has a consensus target price of $152.00, suggesting a potential upside of 25.71%. Mercury Systems has a consensus target price of $55.20, suggesting a potential upside of 22.72%. Given Hubbell’s stronger consensus rating and higher probable upside, equities analysts plainly believe Hubbell is more favorable than Mercury Systems.

Institutional & Insider Ownership

85.5% of Hubbell shares are owned by institutional investors. Comparatively, 93.5% of Mercury Systems shares are owned by institutional investors. 0.7% of Hubbell shares are owned by insiders. Comparatively, 3.5% of Mercury Systems shares are owned 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.

Summary

Hubbell beats Mercury Systems on 10 of the 16 factors compared between the two stocks.

Hubbell Company Profile

Hubbell Incorporated designs, manufactures, and sells electrical and electronic products in the United States and internationally. It operates through two segments, Electrical and Power. The Electrical segment offers standard and special application wiring device products, rough-in electrical products, connector and grounding products, lighting fixtures and controls, and other electrical equipment for use in industrial, commercial, and institutional facilities by electrical contractors, maintenance personnel, electricians, utilities, and telecommunications companies, as well as components and assemblies for the natural gas distribution market. It also designs and manufactures various high voltage test and measurement equipment, industrial controls, and communication systems for use in the non-residential and industrial markets, as well as in the oil and gas, and mining industries. This segment sells its products through electrical and industrial distributors, home centers, retail and hardware outlets, lighting showrooms, and residential product oriented Internet sites; special application products primarily through wholesale distributors to contractors, industrial customers, and original equipment manufacturers; and high voltage products directly to its customers through sales engineers. The Power segment designs, manufactures, and sells distribution, transmission, substation, and telecommunications products. This segment sells its products to distributors, as well as directly to users, such as utilities, telecommunication companies, pipeline and mining operations, industrial firms, construction and engineering firms, and civil construction and transportation industries. Hubbell Incorporated was founded in 1888 and is headquartered in Shelton, Connecticut.

Mercury Systems Company Profile

Mercury Systems, Inc. provides sensor and safety critical mission processing subsystems for various critical defense and intelligence programs in the United States. The company's products and solutions are deployed in approximately 300 programs with 25 defense prime contractors. Its principal programs include Aegis, Patriot, Surface Electronic Warfare Improvement Program, Gorgon Stare, Predator, F-35, Reaper, F-16 SABR, E2D Hawkeye, and Paveway. The company also designs, markets, and licenses software and middleware environments under the MultiCore Plus name to accelerate development and execution of signal and image processing applications on a range of heterogeneous and multi-computing platforms. In addition, it offers hardware products, including components, such as power amplifiers and limiters, switches, oscillators, filters, equalizers, digital and analog converters, chips, monolithic microwave integrated circuits, and memory and storage devices; embedded processing modules and boards, switch fabric boards, high speed input/output boards, digital receiver boards, multi-chip modules, integrated radio frequency and microwave multi-function assemblies, tuners, and transceivers, as well as graphics and video processing, and Ethernet and input-output boards; and integrated subsystems. The company was formerly known as Mercury Computer Systems, Inc. and changed its name to Mercury Systems, Inc. in November 2012. Mercury Systems, Inc. was founded in 1981 and is headquartered in Andover, Massachusetts.

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