Distribution Solutions Group (NASDAQ:DSGR) vs. ZKH Group (NYSE:ZKH) Head-To-Head Review

ZKH Group (NYSE:ZKH) and Distribution Solutions Group (NASDAQ:DSGR) are both small-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.

Analyst Ratings

This is a summary of recent recommendations and price targets for ZKH Group and Distribution Solutions Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZKH Group	1	0	0	0	1.00
Distribution Solutions Group	0	4	0	0	2.00

Distribution Solutions Group has a consensus target price of $35.00, suggesting a potential upside of 0.72%. Given Distribution Solutions Group’s stronger consensus rating and higher possible upside, analysts plainly believe Distribution Solutions Group is more favorable than ZKH Group.

Volatility and Risk

ZKH Group has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Distribution Solutions Group has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.

Profitability

This table compares ZKH Group and Distribution Solutions Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ZKH Group	-0.02%	-0.06%	-0.03%
Distribution Solutions Group	0.44%	9.33%	3.41%

Institutional and Insider Ownership

9.5% of ZKH Group shares are held by institutional investors. Comparatively, 91.6% of Distribution Solutions Group shares are held by institutional investors. 78.8% of Distribution Solutions Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares ZKH Group and Distribution Solutions Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZKH Group	$9.44 billion	0.04	-$19.44 million	($0.01)	-291.50
Distribution Solutions Group	$2.05 billion	0.78	$8.35 million	$0.19	182.89

Distribution Solutions Group has lower revenue, but higher earnings than ZKH Group. ZKH Group is trading at a lower price-to-earnings ratio than Distribution Solutions Group, indicating that it is currently the more affordable of the two stocks.

Summary

Distribution Solutions Group beats ZKH Group on 12 of the 13 factors compared between the two stocks.

About ZKH Group

ZKH Group Limited develops and operates a maintenance, repair, and operating (MRO) products trading and service platform that offers spare parts, chemicals, manufacturing parts, general consumables, and office supplies in the People’s Republic of China. The company provides MRO procurement and management services; digitalized MRO procurement solutions; and logistics and warehousing services. It also engages in the production and sale of intelligent warehousing equipment. ZKH Group Limited was founded in 1998 and is based in Shanghai, the People’s Republic of China.

About Distribution Solutions Group

Distribution Solutions Group, Inc., a specialty distribution company, engages in the provision of value-added distribution solutions in North America, Europe, Asia, South America, and the Middle East. The company provides its solutions to the maintenance, repair, and operations (MRO); original equipment manufacturer (OEM); and industrial technology markets. It operates through three segments: Lawson, Gexpro Services, and TestEquity. The Lawson segment distributes of specialty products and services to the industrial, commercial, institutional, and government MRO market. The TestEquity segment distributes test and measurement equipment and solutions, industrial and electronic production supplies, and vendor managed inventory programs, as well as converting, fabrication, and adhesive solutions under the TestEquity, Hisco, TEquipment, Techni-Tool, Jensen Tools, and Instrumex brands. The Gexpro Services segment provides supply chain management solutions that offer VMI, kitting, global logistics management, manufacturing localization and import expertise, value engineering, and quality assurance. The company was formerly known as Lawson Products, Inc. and has changed to Distribution Solutions Group, Inc. 2022 Distribution Solutions Group, Inc. was incorporated in 1952 and is headquartered in Fort Worth, Texas.