Comparing ScanSource (SCSC) & Tech Data (TECD)

ScanSource (NASDAQ: SCSC) and Tech Data (NASDAQ:TECD) are both industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Earnings & Valuation

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This table compares ScanSource and Tech Data’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ScanSource $3.57 billion 0.26 $69.24 million $2.75 13.29
Tech Data $36.78 billion 0.09 $116.64 million $9.11 9.02

Tech Data has higher revenue and earnings than ScanSource. Tech Data is trading at a lower price-to-earnings ratio than ScanSource, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

ScanSource has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Tech Data has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for ScanSource and Tech Data, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ScanSource 0 0 1 0 3.00
Tech Data 0 2 6 0 2.75

ScanSource currently has a consensus price target of $43.00, indicating a potential upside of 17.65%. Tech Data has a consensus price target of $110.29, indicating a potential upside of 34.22%. Given Tech Data’s higher possible upside, analysts plainly believe Tech Data is more favorable than ScanSource.

Profitability

This table compares ScanSource and Tech Data’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ScanSource 1.18% 9.06% 4.17%
Tech Data 0.32% 12.83% 3.06%

Insider & Institutional Ownership

96.4% of ScanSource shares are held by institutional investors. Comparatively, 96.2% of Tech Data shares are held by institutional investors. 2.4% of ScanSource shares are held by insiders. Comparatively, 1.6% of Tech Data shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

ScanSource beats Tech Data on 8 of the 14 factors compared between the two stocks.

About ScanSource

ScanSource, Inc. distributes technology products and solutions in North America, Latin America, and Europe. The company's Worldwide Barcode, Networking & Security segment focuses on automatic identification and data capture (AIDC), point-of-sale (POS), networking, electronic physical security, 3D printing, and other specialty technologies. Its AIDC and POS products are used to automate the collection, processing, and communication of information for commercial and industrial applications, such as retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications; electronic physical security products, including identification, access control, video surveillance, intrusion-related, wireless, and networking infrastructure products; and 3D printing solutions to replace and complement traditional methods, as well as reduce the time and cost of designing new products. Its Worldwide Communications & Services segment focuses on communications technologies and services. This segment provides voice and data products, such as private branch exchanges (PBX), key systems, and telephone handsets and components that are used in voice, fax, data, voice recognition, call center management, and IP communication applications; converged communication products, such as telephone and IP network interfaces, voice over Internet protocol systems, PBX integration products, and carrier-class board systems-level products; and video products comprising video and voice conferencing, and network systems. This segment also offers data networking products that include switches, servers, and routers; and provides value-added support programs and services, such as education and training, customer configuration, marketing services, network assessments, WiFi services, and partnership programs. ScanSource, Inc. was founded in 1992 and is headquartered in Greenville, South Carolina.

About Tech Data

Tech Data Corporation is a wholesale distributor of technology products. The Company serves as a link in the technology supply chain by bringing products from the technology vendors to market, as well as providing its customers with logistics capabilities and services. It operates through the segment of distributing technology products, logistics management and other value-added services. It operates in two geographic segments: the Americas and Europe. It provides resellers training and technical support suite of electronic commerce tools customized shipping documents product configuration or integration services and access to financing programs. Its customers include value-added resellers, direct marketers, retailers and corporate resellers who support the diverse technology needs of end users. It sells its products to customers in approximately 100 countries throughout North America, South America, Europe, the Middle East and Africa.

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