Analyzing Crane NXT (NYSE:CXT) and CDW (NASDAQ:CDW)

CDW (NASDAQ:CDW) and Crane NXT (NYSE:CXT) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares CDW and Crane NXT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CDW	4.60%	50.61%	7.91%
Crane NXT	7.78%	19.87%	7.43%

Institutional & Insider Ownership

93.2% of CDW shares are owned by institutional investors. Comparatively, 77.5% of Crane NXT shares are owned by institutional investors. 0.8% of CDW shares are owned by company insiders. Comparatively, 0.8% of Crane NXT shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for CDW and Crane NXT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CDW	0	3	5	1	2.78
Crane NXT	0	2	5	1	2.88

CDW presently has a consensus target price of $150.12, indicating a potential upside of 12.63%. Crane NXT has a consensus target price of $66.83, indicating a potential upside of 36.84%. Given Crane NXT’s stronger consensus rating and higher possible upside, analysts plainly believe Crane NXT is more favorable than CDW.

Dividends

CDW pays an annual dividend of $2.52 per share and has a dividend yield of 1.9%. Crane NXT pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. CDW pays out 30.3% of its earnings in the form of a dividend. Crane NXT pays out 29.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CDW has raised its dividend for 10 consecutive years and Crane NXT has raised its dividend for 2 consecutive years. CDW is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares CDW and Crane NXT”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CDW	$22.42 billion	0.74	$1.07 billion	$8.32	16.02
Crane NXT	$1.66 billion	1.70	$145.10 million	$2.42	20.18

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

Risk & Volatility

CDW has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Crane NXT has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Summary

CDW beats Crane NXT on 9 of the 16 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 Crane NXT

Crane NXT, Co. operates as an industrial technology company that provides technology solutions to secure, detect, and authenticate customers’ important assets. The company operates through Crane Payment Innovations and Crane Currency segments. The Crane Payment Innovations segment offers electronic equipment and associated software, as well as advanced automation solutions, processing systems, field service solutions, remote diagnostics, and productivity software solutions. The Crane Currency segment provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods, and industrial products. Crane NXT, Co. was incorporated in 2021 and is based in Waltham, Massachusetts.