Hexcel Corporation (HXL) vs Mercury Systems Inc (MRCY)

Hexcel Corporation and Mercury Systems Inc are both Aerospace & Defense companies. Hexcel Corporation is the larger, with a market value of $6.8B against $4.7B — 1.5× the size. Mercury Systems Inc has negative trailing earnings, so its P/E is not meaningful; Hexcel Corporation trades at 45.1×. Mercury Systems Inc grew revenue faster over the last twelve months: 7.85% against 5.41%. Hexcel Corporation has the higher net margin (7.76% vs −3.02%) and the higher return on invested capital (6.47% vs 0.01%). Across the 21 metrics below, Hexcel Corporation leads on 14 and Mercury Systems Inc on 7.

Valuation

Metric HXL MRCY Aerospace & Defense median
P/E 45.11 n/m 31.81
P/S 3.45 4.49 3.55
P/B 5.26 2.95 2.59
Price to free cash flow 26.72 64.86 31.99
EV/EBITDA 22.05 63.78 18.08
EV/Sales 3.91 4.73 3.37
Earnings yield 2.22% (0.67%) 1.38%
Free cash flow yield 3.74% 1.54% 0.21%

Profitability

Metric HXL MRCY Aerospace & Defense median
Gross margin 24.96% 28.58% 25.48%
Operating margin 11.50% 0.03% 4.54%
Net margin 7.76% (3.02%) 2.22%
Free cash flow margin 12.92% 6.92% 1.43%
Return on equity 10.76% (2.00%) 6.43%
Return on assets 5.51% (1.25%) 2.70%
Return on invested capital 6.47% 0.01% 1.56%

Growth

Metric HXL MRCY Aerospace & Defense median
Revenue growth (TTM) 5.41% 7.85% 18.43%
EPS growth (last fiscal year) (13.84%) 23.08% 24.27%
Revenue growth, 5-year CAGR 4.74% 1.26% 9.73%
Net income growth, 5-year CAGR 28.11% 0.00% 0.00%

Health

Metric HXL MRCY Aerospace & Defense median
Debt to equity 0.74 0.29 0.24
Current ratio 2.43 2.96 2.72
Net debt to EBITDA 3.15 3.11 1.12

Dividend

Metric HXL MRCY Aerospace & Defense median
Dividend yield 0.79% — 0.90%
Payout ratio 0.36 — 0.32

Size

Metric HXL MRCY Aerospace & Defense median
Market cap 6.80b 4.65b 2.19b

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