Comparing Arrow Electronics (NYSE:ARW) and CDW (NASDAQ:CDW)

CDW (NASDAQ:CDW) and Arrow Electronics (NYSE:ARW) are both large-cap technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and price targets for CDW and Arrow Electronics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CDW	0	3	5	1	2.78
Arrow Electronics	1	1	3	1	2.67

CDW currently has a consensus price target of $150.38, indicating a potential upside of 4.08%. Arrow Electronics has a consensus price target of $233.25, indicating a potential upside of 7.26%. Given Arrow Electronics’ higher probable upside, analysts clearly believe Arrow Electronics is more favorable than CDW.

Profitability

This table compares CDW and Arrow Electronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CDW	4.60%	50.61%	7.91%
Arrow Electronics	2.26%	13.41%	2.83%

Risk and Volatility

CDW has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Arrow Electronics has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Valuation and Earnings

This table compares CDW and Arrow Electronics”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CDW	$22.42 billion	0.81	$1.07 billion	$8.32	17.37
Arrow Electronics	$35.92 billion	0.31	$571.27 million	$15.65	13.90

CDW has higher earnings, but lower revenue than Arrow Electronics. Arrow Electronics is trading at a lower price-to-earnings ratio than CDW, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

93.2% of CDW shares are held by institutional investors. Comparatively, 99.3% of Arrow Electronics shares are held by institutional investors. 0.8% of CDW shares are held by insiders. Comparatively, 0.8% of Arrow Electronics shares are held by 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.

Summary

CDW beats Arrow Electronics on 9 of the 14 factors compared between the two stocks.

About CDW

CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products and services, as well as integrated IT solutions, including on-premise and cloud capabilities across hybrid infrastructure, digital experience, and security. It also provides hardware products comprising notebooks/mobile devices, tablets, network communications, desktop computers, collaboration, data storage and servers, and others; and software products, such as cloud solutions, software assurance, application suites, security, virtualization, operating systems, and network management. In addition, the company offers advisory and design, software development, implementation, managed, professional, configuration, partner, and telecom services, as well as warranties; delivers and manages mission critical software, systems, and network solutions; and implementation and installation, and repair services to its customers through various third-party service providers. It serves government, education, and healthcare customers; and small, medium, and large business customers. CDW Corporation was founded in 1984 and is headquartered in Vernon Hills, Illinois.

About Arrow Electronics

Arrow Electronics, Inc. provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Global Components and Global Enterprise Computing Solutions. The Global Components segment markets and distributes electronic components comprising semiconductor products and related services; interconnect, passive, and electromechanical products, including capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; and computing and memory products, as well as other products and services. The Global Enterprise Computing Solutions segment offers computing solutions, such as datacenter, cloud, security, and analytics solutions. This segment also provides access to various services, including engineering and integration support, warehousing and logistics, marketing resources, and authorized hardware and software training. The company serves original equipment manufacturers, value-added resellers, managed service providers, contract manufacturers, and other commercial customers. Arrow Electronics, Inc. was founded in 1935 and is based in Centennial, Colorado.