Head-To-Head Survey: Avnet (NASDAQ:AVT) & ePlus (NASDAQ:PLUS)

Avnet (NASDAQ:AVT) and ePlus (NASDAQ:PLUS) are both mid-cap technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Dividends

Avnet pays an annual dividend of $1.48 per share and has a dividend yield of 1.5%. ePlus pays an annual dividend of $1.08 per share and has a dividend yield of 1.1%. Avnet pays out 37.1% of its earnings in the form of a dividend. ePlus pays out 23.6% 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. Avnet has increased its dividend for 12 consecutive years. Avnet is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Avnet and ePlus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avnet	1.21%	9.57%	3.47%
ePlus	4.91%	11.51%	6.73%

Analyst Ratings

This is a summary of current ratings and price targets for Avnet and ePlus, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avnet	1	1	2	2	2.83
ePlus	0	2	0	0	2.00

Avnet currently has a consensus price target of $93.25, indicating a potential downside of 4.06%. Given Avnet’s stronger consensus rating and higher probable upside, analysts clearly believe Avnet is more favorable than ePlus.

Institutional and Insider Ownership

95.8% of Avnet shares are held by institutional investors. Comparatively, 93.8% of ePlus shares are held by institutional investors. 1.9% of Avnet shares are held by company insiders. Comparatively, 2.2% of ePlus shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Avnet and ePlus”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avnet	$27.63 billion	0.29	$334.39 million	$3.99	24.36
ePlus	$2.44 billion	1.01	$132.64 million	$4.57	20.72

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

Risk & Volatility

Avnet has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, ePlus has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Summary

Avnet beats ePlus on 11 of the 18 factors compared between the two stocks.

About Avnet

Avnet, Inc., distributes electronic component technology. The company operates through two segments, Electronic Components and Farnell. The Electronic Components segment markets, sells, and distributes semiconductors; interconnect, passive, and electromechanical components; and other integrated components from electronic component manufacturers. It also offers design chain support that provides engineers with technical design solutions; engineering and technical resources to support product design, bill of materials development, and technical education and training; and supply chain solutions that provide support and logistical services to original equipment manufacturers, electronic manufacturing service providers, and electronic component manufacturers. In addition, this segment provides embedded solutions, such as technical design, integration, and assembly of embedded products, systems, and solutions primarily for industrial applications, as well as embedded display solutions comprising touch and passive displays; and develops and manufactures standard board and industrial subsystems, and application-specific devices that enable it to produce systems tailored to specific customer requirements. This segment serves various markets, such as automotive, medical, defense, aerospace, telecommunications, industrial, and digital editing. The Farnell segment distributes kits, tools, and electronic and industrial automation components, as well as test and measurement products to engineers and entrepreneurs. It has operations in the Americas, Europe, the Middle East, Africa, and Asia. Avnet, Inc. was founded in 1921 and is headquartered in Phoenix, Arizona.

About ePlus

ePlus inc., together with its subsidiaries, provides information technology (IT) solutions that enable organizations to optimize their IT environment and supply chain processes in the United States and internationally. It operates through two segments, Technology and Financing. The Technology segment offers hardware, perpetual and subscription software, maintenance, software assurance, and internally provided and outsourced services; managed services or infrastructure and cloud; and enhanced maintenance support, service desk, storage-as-a-service, cloud hosted and managed, and managed security services; and professional, staff augmentation, cloud consulting, consulting, and security services. The Financing segment engages in financing arrangements, such as sales-type and operating leases; loans and consumption-based financing arrangements; and underwriting, management, and disposal of IT equipment and assets. Its financing operations comprise sales, pricing, credit, contracts, accounting, and risk and asset management. This segment primarily finances IT, communication-related, and medical equipment; and industrial machinery and equipment, office furniture and general office equipment, transportation equipment, and other general business equipment directly, as well as through vendors. The company serves commercial entities, state and local governments, government contractors, healthcare, and educational institutions. The company was formerly known as MLC Holdings, Inc. and changed its name to ePlus inc. in 1999. ePlus inc. was founded in 1990 and is headquartered in Herndon, Virginia.