Carpenter Technology (NYSE:CRS) and Mercury Systems (NASDAQ:MRCY) Financial Review

Mercury Systems (NASDAQ:MRCY) and Carpenter Technology (NYSE:CRS) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Risk & Volatility

Mercury Systems has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Carpenter Technology has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mercury Systems	-3.02%	1.29%	0.78%
Carpenter Technology	16.96%	26.46%	15.02%

Institutional and Insider Ownership

96.0% of Mercury Systems shares are owned by institutional investors. Comparatively, 92.0% of Carpenter Technology shares are owned by institutional investors. 1.4% of Mercury Systems shares are owned by company insiders. Comparatively, 2.9% of Carpenter Technology shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Mercury Systems and Carpenter Technology”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercury Systems	$983.62 million	4.95	-$29.67 million	($0.50)	-162.06
Carpenter Technology	$3.12 billion	6.67	$529.80 million	$10.52	39.98

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

Analyst Ratings

This is a summary of current ratings for Mercury Systems and Carpenter Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercury Systems	2	4	6	1	2.46
Carpenter Technology	0	1	8	1	3.00

Mercury Systems presently has a consensus target price of $110.55, suggesting a potential upside of 36.43%. Carpenter Technology has a consensus target price of $577.25, suggesting a potential upside of 37.24%. Given Carpenter Technology’s stronger consensus rating and higher possible upside, analysts plainly believe Carpenter Technology is more favorable than Mercury Systems.

Summary

Carpenter Technology beats Mercury Systems on 13 of the 14 factors compared between the two stocks.

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.

About Carpenter Technology

Carpenter Technology Corporation engages in the manufacture, fabrication, and distribution of specialty metals in the United States, Europe, the Asia Pacific, Mexico, Canada, and internationally. It operates in two segments, Specialty Alloys Operations and Performance Engineered Products. The company offers specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels, and tool steels, as well as additives, and metal powders and parts. It serves to aerospace, defense, medical, transportation, energy, industrial, and consumer markets. The company was founded in 1889 and is headquartered in Philadelphia, Pennsylvania.