Embraer-Empresa Brasileira de Aeronautica (NYSE:EMBJ – Get Free Report) and Mercury Systems (NASDAQ:MRCY – Get Free Report) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.
Volatility and Risk
Embraer-Empresa Brasileira de Aeronautica has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.
Profitability
This table compares Embraer-Empresa Brasileira de Aeronautica and Mercury Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Embraer-Empresa Brasileira de Aeronautica | 5.35% | 11.90% | 3.51% |
| Mercury Systems | -3.02% | 1.29% | 0.78% |
Analyst Ratings
This is a summary of recent recommendations for Embraer-Empresa Brasileira de Aeronautica and Mercury Systems, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Embraer-Empresa Brasileira de Aeronautica | 0 | 0 | 3 | 1 | 3.25 |
| Mercury Systems | 2 | 4 | 5 | 2 | 2.54 |
Embraer-Empresa Brasileira de Aeronautica currently has a consensus target price of $92.50, suggesting a potential upside of 28.06%. Mercury Systems has a consensus target price of $112.80, suggesting a potential upside of 47.62%. Given Mercury Systems’ higher probable upside, analysts clearly believe Mercury Systems is more favorable than Embraer-Empresa Brasileira de Aeronautica.
Valuation and Earnings
This table compares Embraer-Empresa Brasileira de Aeronautica and Mercury Systems”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Embraer-Empresa Brasileira de Aeronautica | $7.58 billion | 1.72 | $351.90 million | $2.47 | 29.24 |
| Mercury Systems | $983.62 million | 4.73 | -$29.67 million | ($0.50) | -152.82 |
Embraer-Empresa Brasileira de Aeronautica has higher revenue and earnings than Mercury Systems. Mercury Systems is trading at a lower price-to-earnings ratio than Embraer-Empresa Brasileira de Aeronautica, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
34.6% of Embraer-Empresa Brasileira de Aeronautica shares are owned by institutional investors. Comparatively, 96.0% of Mercury Systems shares are owned by institutional investors. 1.0% of Embraer-Empresa Brasileira de Aeronautica shares are owned by company insiders. Comparatively, 1.0% of Mercury Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
Embraer-Empresa Brasileira de Aeronautica beats Mercury Systems on 10 of the 15 factors compared between the two stocks.
About Embraer-Empresa Brasileira de Aeronautica
Embraer S.A. designs, develops, manufactures, and sells aircraft and systems in North America, Latin America, the Asia Pacific, Brazil, Europe, and internationally. The company operates through Commercial Aviation; Defense & Security; Executive Aviation; Services & Support; and Other segments. The Commercial Aviation segment designs, develops, manufactures, and sells commercial jets, as well as leases aircraft. The Defense & Security segment engages in the research, development, production, modification, and support for military defense and security aircraft; and offers a range of products and integrated solutions that include radars, special space systems, and cyber security solutions, as well as information and communications systems comprising command, control, communications, computer, intelligence, surveillance, and reconnaissance systems. The Executive Aviation segment develops, produces, and sells executive jets. This segment also leases Phenom family executive jets in the entry jet and light jet categories; and Praetor 500 and Praetor 600, disruptive executive jets in the midsize and super midsize categories. The Service & Support segment provides after-service solutions and support services; maintenance, repair, and overhaul services for commercial, executive, and defense aircraft; and aircraft components and engines. This segment also supplies steel and composite aviation structures to various aircraft manufacturers. The Other segment engages in the supply of fuel systems, structural parts, and mechanical and hydraulic systems; and production of agricultural crop-spraying aircraft. The company was formerly known as Embraer-Empresa Brasileira de Aeronáutica S.A. and changed its name to Embraer S.A. in November 2010. Embraer S.A. was incorporated in 1969 and is headquartered in São Paulo, Brazil.
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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