Contrasting ScanSource (NASDAQ:SCSC) and Heritage Media (OTCMKTS:OLVI)

Heritage Media (OTCMKTS:OLVI) and ScanSource (NASDAQ:SCSC) are both small-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Analyst Ratings

This is a breakdown of current ratings and price targets for Heritage Media and ScanSource, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Media	0	0	0	0	0.00
ScanSource	0	4	0	0	2.00

ScanSource has a consensus price target of $43.00, suggesting a potential downside of 20.56%. Given ScanSource’s stronger consensus rating and higher possible upside, analysts clearly believe ScanSource is more favorable than Heritage Media.

Earnings and Valuation

This table compares Heritage Media and ScanSource”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Media	$82.76 million	1.56	-$20.70 million	($0.05)	-4.02
ScanSource	$3.23 billion	0.34	$78.87 million	$3.66	14.79

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

Profitability

This table compares Heritage Media and ScanSource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Media	-25.04%	N/A	N/A
ScanSource	2.44%	10.10%	5.11%

Insider and Institutional Ownership

97.9% of ScanSource shares are owned by institutional investors. 3.2% of ScanSource shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Heritage Media has a beta of -2.02, indicating that its stock price is 302% less volatile than the S&P 500. Comparatively, ScanSource has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Summary

ScanSource beats Heritage Media on 12 of the 13 factors compared between the two stocks.

About Heritage Media

Heritage Media Corporation was formerly known as Lignin Industries Inc. Heritage Media Corporation is based in Calgary, Canada.

About ScanSource

ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, and intrusion-related devices; networking products comprising wireless and networking infrastructure products; other software-as-a-service (SaaS) products; and engages in hardware rental activities. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.