ScanSource (NASDAQ:SCSC – Get Free Report) and SiteOne Landscape Supply (NYSE:SITE – Get Free Report) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.
Volatility and Risk
ScanSource has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, SiteOne Landscape Supply has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.
Valuation & Earnings
This table compares ScanSource and SiteOne Landscape Supply”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ScanSource | $3.04 billion | 0.31 | $71.55 million | $3.01 | 14.25 |
| SiteOne Landscape Supply | $4.54 billion | 1.22 | $123.60 million | $2.74 | 45.29 |
SiteOne Landscape Supply has higher revenue and earnings than ScanSource. ScanSource is trading at a lower price-to-earnings ratio than SiteOne Landscape Supply, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
97.9% of ScanSource shares are owned by institutional investors. 4.2% of ScanSource shares are owned by insiders. Comparatively, 2.6% of SiteOne Landscape Supply shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for ScanSource and SiteOne Landscape Supply, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ScanSource | 0 | 3 | 1 | 0 | 2.25 |
| SiteOne Landscape Supply | 1 | 7 | 5 | 0 | 2.31 |
ScanSource presently has a consensus price target of $42.50, suggesting a potential downside of 0.89%. SiteOne Landscape Supply has a consensus price target of $148.50, suggesting a potential upside of 19.65%. Given SiteOne Landscape Supply’s stronger consensus rating and higher probable upside, analysts plainly believe SiteOne Landscape Supply is more favorable than ScanSource.
Profitability
This table compares ScanSource and SiteOne Landscape Supply’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ScanSource | 2.35% | 9.38% | 4.87% |
| SiteOne Landscape Supply | 2.69% | 7.80% | 3.88% |
Summary
SiteOne Landscape Supply beats ScanSource on 9 of the 14 factors compared between the two stocks.
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.
About SiteOne Landscape Supply
SiteOne Landscape Supply, Inc., together with its subsidiaries, engages in the wholesale distribution of landscape supplies in the United States and Canada. The company provides irrigation products, including controllers, valves, sprinkler heads, irrigation pipes, micro irrigation, and drip products; fertilizer, grass seed, and ice melt products; control products, such as herbicides, fungicides, rodenticides, and other pesticides; landscape accessories that include mulches, soil amendments, drainage pipes, tools, and sods; nursery goods, which consist of deciduous and evergreen shrubs, ornamental, shade, evergreen trees, field grown and container-grown nursery stock, roses, perennials, annuals, bulbs, and plant species and cultivars; hardscapes, such as pavers, natural stones, blocks, and other durable materials; and outdoor lighting products that include lighting fixtures, LED lamps, wires, transformers, and accessories. It also offers consultative services consisting of assistance with irrigation project take-offs, commercial project planning, generation of sales leads, business operations, and product support services, as well as a series of technical and business management seminars; and distributes branded products of third parties. The company offers its products under the LESCO, SiteOne Green Tech, and Pro-Trade brand names. It markets its products primarily to residential and commercial landscape professionals who specializes in the design, installation, and maintenance of lawns, gardens, golf courses, and other outdoor spaces through branch network and direct distribution. SiteOne Landscape Supply, Inc. was incorporated in 2013 and is headquartered in Roswell, Georgia.
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