Mercury Systems (NASDAQ: MRCY) and L-3 Communications Holdings (NYSE:LLL) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, institutional ownership and profitabiliy.
Profitability
This table compares Mercury Systems and L-3 Communications Holdings’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Mercury Systems | 6.48% | 4.58% | 3.07% |
| L-3 Communications Holdings | 6.44% | 14.15% | 5.60% |
Volatility & Risk
Mercury Systems has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500. Comparatively, L-3 Communications Holdings has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Mercury Systems and L-3 Communications Holdings, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Mercury Systems | 0 | 2 | 6 | 0 | 2.75 |
| L-3 Communications Holdings | 0 | 8 | 5 | 0 | 2.38 |
Mercury Systems presently has a consensus price target of $42.20, suggesting a potential downside of 3.06%. L-3 Communications Holdings has a consensus price target of $179.40, suggesting a potential upside of 2.53%. Given L-3 Communications Holdings’ higher probable upside, analysts clearly believe L-3 Communications Holdings is more favorable than Mercury Systems.
Insider and Institutional Ownership
98.8% of Mercury Systems shares are owned by institutional investors. Comparatively, 81.9% of L-3 Communications Holdings shares are owned by institutional investors. 4.3% of Mercury Systems shares are owned by company insiders. Comparatively, 2.9% of L-3 Communications Holdings 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.
Valuation & Earnings
This table compares Mercury Systems and L-3 Communications Holdings’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Mercury Systems | $378.41 million | 5.52 | $69.10 million | $0.61 | 71.36 |
| L-3 Communications Holdings | $10.90 billion | 1.25 | $1.32 billion | $8.87 | 19.73 |
L-3 Communications Holdings has higher revenue and earnings than Mercury Systems. L-3 Communications Holdings 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
L-3 Communications Holdings pays an annual dividend of $3.00 per share and has a dividend yield of 1.7%. Mercury Systems does not pay a dividend. L-3 Communications Holdings pays out 33.8% of its earnings in the form of a dividend. L-3 Communications Holdings has raised its dividend for 13 consecutive years.
Summary
L-3 Communications Holdings beats Mercury Systems on 9 of the 17 factors compared between the two stocks.
Mercury Systems Company Profile
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.
L-3 Communications Holdings Company Profile
L3 Technologies, Inc., formerly L-3 Communications Holdings, Inc., is a prime contractor in Intelligence, Surveillance and Reconnaissance (ISR) systems, aircraft sustainment, simulation and training, night vision and image intensification equipment and security and detection systems. The Company provides a broad range of communication and electronic systems and products used on military and commercial platforms. It operates through four segments: Electronic Systems, Aerospace Systems, Communication Systems and Sensor Systems. Electronic Systems provides a broad range of products and services for military and commercial customers in several niche markets across several business areas. Aerospace Systems delivers integrated solutions and provides engineering, modernization, upgrade, sustainment, and maintenance and logistics support. Communication Systems delivers products and services for the global communications market. Sensor Systems provides diverse sensor technologies.
Receive News & Ratings for Mercury Systems Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Mercury Systems Inc and related companies with MarketBeat.com's FREE daily email newsletter.
