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 $6.4B against $5.1B — 1.3× the size. Mercury Systems Inc has negative trailing earnings, so its P/E is not meaningful; Hexcel Corporation trades at 42.9×. 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 42.88 n/m 33.00
P/S 3.28 4.97 3.63
P/B 5.00 3.26 3.24
Price to free cash flow 25.40 71.77 34.01
EV/EBITDA 21.09 70.22 18.69
EV/Sales 3.74 5.21 3.94
Earnings yield 2.33% (0.60%) 1.31%
Free cash flow yield 3.94% 1.39% 0.00%

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% 0.00%
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% —
Revenue growth, 5-year CAGR 4.74% 1.26% 9.62%
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 0.82% — 1.04%
Payout ratio 0.26 0.00 0.00

Size

Metric HXL MRCY Aerospace & Defense median
Market cap 6.40b 5.06b 2.52b

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