Analyzing Mercury Systems (NASDAQ:MRCY) and Park Aerospace (NYSE:PKE)

Mercury Systems (NASDAQ:MRCY) and Park Aerospace (NYSE:PKE) are both aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Earnings & Valuation

This table compares Mercury Systems and Park Aerospace”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercury Systems	$966.95 million	7.32	-$37.90 million	($0.24)	-490.92
Park Aerospace	$73.30 million	9.42	$11.27 million	$0.56	59.06

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mercury Systems	-1.46%	2.22%	1.32%
Park Aerospace	15.38%	10.08%	9.06%

Risk & Volatility

Mercury Systems has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Park Aerospace has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.

Institutional & Insider Ownership

96.0% of Mercury Systems shares are owned by institutional investors. Comparatively, 77.8% of Park Aerospace shares are owned by institutional investors. 1.4% of Mercury Systems shares are owned by company insiders. Comparatively, 11.3% of Park Aerospace shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Mercury Systems and Park Aerospace, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercury Systems	2	3	3	2	2.50
Park Aerospace	0	0	1	0	3.00

Mercury Systems presently has a consensus price target of $91.00, suggesting a potential downside of 22.76%. Given Mercury Systems’ higher probable upside, equities analysts plainly believe Mercury Systems is more favorable than Park Aerospace.

Summary

Park Aerospace beats Mercury Systems on 9 of the 15 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 Park Aerospace

Park Aerospace Corp., an aerospace company, develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the aerospace market in North America, Asia, and Europe. It offers advanced composite materials, including film adhesives and lightning strike protection materials that are used to produce primary and secondary structures for jet engines, large and regional transport aircrafts, military aircrafts, unmanned aerial vehicles, business jets, general aviation aircrafts, and rotary wing aircrafts. The company also provides specialty ablative materials for rocket motors and nozzles; and specially designed materials for radome applications. In addition, it designs and fabricates composite parts, structures and assemblies, and low volume tooling for the aerospace industry. The company was formerly known as Park Electrochemical Corp. and changed its name to Park Aerospace Corp. in July 2019. Park Aerospace Corp. was incorporated in 1954 and is based in Westbury, New York.