Mercury Systems (NASDAQ:MRCY) & Alabama Aircraft Industries (OTCMKTS:AAIIQ) Critical Contrast

Alabama Aircraft Industries (OTCMKTS:AAIIQ) and Mercury Systems (NASDAQ:MRCY) are both aerospace companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Alabama Aircraft Industries and Mercury Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alabama Aircraft Industries	0	0	0	0	0.00
Mercury Systems	2	2	4	2	2.60

Mercury Systems has a consensus target price of $81.00, indicating a potential upside of 10.94%. Given Mercury Systems’ stronger consensus rating and higher possible upside, analysts plainly believe Mercury Systems is more favorable than Alabama Aircraft Industries.

Valuation and Earnings

This table compares Alabama Aircraft Industries and Mercury Systems”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alabama Aircraft Industries	N/A	N/A	N/A	N/A	N/A
Mercury Systems	$912.02 million	4.81	-$37.90 million	($0.57)	-128.09

Alabama Aircraft Industries has higher earnings, but lower revenue than Mercury Systems.

Profitability

This table compares Alabama Aircraft Industries and Mercury Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alabama Aircraft Industries	N/A	N/A	N/A
Mercury Systems	-3.53%	1.14%	0.69%

Insider & Institutional Ownership

96.0% of Mercury Systems shares are held by institutional investors. 38.0% of Alabama Aircraft Industries shares are held by insiders. Comparatively, 1.4% of Mercury Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Alabama Aircraft Industries has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Mercury Systems has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Summary

Mercury Systems beats Alabama Aircraft Industries on 9 of the 11 factors compared between the two stocks.

About Alabama Aircraft Industries

Alabama Aircraft Industries, Inc provides aircraft maintenance and modification services to the United States government, foreign governments, and military customers. Its services include maintenance and modification of military transport, tanker, and petrol aircraft airframes; and aircraft maintenance and modification services, such as complete airframe maintenance and repair, and custom air frame design and modification. The company’s services also comprise scheduled and unscheduled maintenance; interior refurbishment and reconfiguration; lavatory, galley, airstair, and auxiliary fuel tank installations; aging aircraft inspection; structural and accident damage repair; manufacturing and parts fabrication; composite repair; service bulletin and AD compliance; component repair and overhaul; EPA approved stripping and painting; CPCP; non-destructive testing; avionics upgrades and installation; and FAA repair station RJ1R454K. Its principal services performed under military contracts are programmed depot maintenance, aircraft modifications, aircraft stripping and painting, rewiring, parts fabrication, engineering support services, system integration of component upgrades, and modification of fixed wing aircrafts. In addition, the company offers airframe corrosion prevention and control, rewiring, and component overhauls, as well as structural, avionics, and other systems modification services. It provides its services directly as a prime contractor or indirectly as a sub- contractor. The company was formerly known as Pemco Aviation Group, Inc. and changed its name to Alabama Aircraft Industries Inc. in September 2007. Alabama Aircraft Industries, Inc was founded in 1983 and is based in Birmingham, Alabama. On Nov 3, 2011, the voluntary petition of Alabama Aircraft Industries, Inc., along with its affiliates, for reorganization under Ch 11 was converted to Ch 7. It had filed for Chapter 11 bankruptcy on Feb 15, 2011.

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.