Contrasting Deswell Industries (NASDAQ:DSWL) and Climb Global Solutions (NASDAQ:CLMB)

Climb Global Solutions (NASDAQ:CLMB) and Deswell Industries (NASDAQ:DSWL) are both small-cap technology companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Earnings and Valuation

This table compares Climb Global Solutions and Deswell Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Climb Global Solutions	$652.52 million	0.81	$21.33 million	$1.12	25.16
Deswell Industries	$61.33 million	0.80	$10.63 million	$0.48	6.42

Climb Global Solutions has higher revenue and earnings than Deswell Industries. Deswell Industries is trading at a lower price-to-earnings ratio than Climb Global Solutions, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Climb Global Solutions and Deswell Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Climb Global Solutions	0	2	2	1	2.80
Deswell Industries	0	0	1	0	3.00

Climb Global Solutions currently has a consensus price target of $31.00, indicating a potential upside of 10.01%. Given Climb Global Solutions’ higher possible upside, equities research analysts clearly believe Climb Global Solutions is more favorable than Deswell Industries.

Profitability

This table compares Climb Global Solutions and Deswell Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Climb Global Solutions	2.88%	18.87%	5.04%
Deswell Industries	N/A	N/A	N/A

Institutional and Insider Ownership

49.7% of Climb Global Solutions shares are owned by institutional investors. 3.8% of Climb Global Solutions shares are owned by insiders. Comparatively, 39.0% of Deswell Industries shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Climb Global Solutions has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Deswell Industries has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Summary

Climb Global Solutions beats Deswell Industries on 13 of the 15 factors compared between the two stocks.

About Climb Global Solutions

Climb Global Solutions Inc. operates as a value-added information technology (IT) distribution and solutions company in the United States, Canada, Europe, the United Kingdom, and internationally. It operates in two segments, Distribution and Solutions. The company distributes technical software to corporate and value-added resellers, consultants, and systems integrators under the name Climb Channel Solutions; and provides cloud solutions and resells software, hardware, and services under the name Grey Matter. It also resells computer software and hardware developed by others, as well as provides technical services to end user customers. In addition, the company offers a line of products from various software vendors; and tools for virtualization/cloud computing, security, networking, storage and infrastructure management, application lifecycle management, and other technically sophisticated domains, as well as computer hardware. It markets its products through its own web sites, local and on-line seminars, events, webinars, and social media, as well as direct email and printed materials. The company was formerly known as Wayside Technology Group, Inc. and changed its name to Climb Global Solutions Inc. in October 2022. Climb Global Solutions Inc. was incorporated in 1982 and is headquartered in Eatontown, New Jersey.

About Deswell Industries

Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers in China, the United States, Europe, Hong Kong, the United Kingdom, Canada, and internationally. It operates through two segments, Plastic Injection Molding and Electronic Products Assembling. The company produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, printers, scanners; parts for industrial components, and indoor control switches, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps; parts for medical products comprising apparatus for blood tests; laser key caps; automobile components; and plastic components of automatic robot. It also provides electronic products that consist of audio equipment, including digital and analogue audio mixers, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, wired and wireless audio streaming products, and headphones; printed circuit board assemblies; and medical products. The company was founded in 1987 and is based in Macau.