Comparing CDW (NASDAQ:CDW) and Arrow Electronics (NYSE:ARW)

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

Volatility and Risk

Arrow Electronics has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, CDW has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Valuation and Earnings

This table compares Arrow Electronics and CDW”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arrow Electronics	$30.85 billion	0.36	$571.27 million	$15.65	13.82
CDW	$22.42 billion	0.85	$1.07 billion	$8.32	18.31

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

Profitability

This table compares Arrow Electronics and CDW’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arrow Electronics	2.26%	13.41%	2.83%
CDW	4.60%	50.61%	7.91%

Insider & Institutional Ownership

99.3% of Arrow Electronics shares are owned by institutional investors. Comparatively, 93.2% of CDW shares are owned by institutional investors. 0.8% of Arrow Electronics shares are owned by company insiders. Comparatively, 0.8% of CDW shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Arrow Electronics and CDW, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arrow Electronics	1	1	3	1	2.67
CDW	0	3	5	1	2.78

Arrow Electronics currently has a consensus target price of $233.25, indicating a potential upside of 7.82%. CDW has a consensus target price of $147.00, indicating a potential downside of 3.53%. Given Arrow Electronics’ higher possible upside, equities analysts plainly believe Arrow Electronics is more favorable than CDW.

Summary

CDW beats Arrow Electronics on 9 of the 14 factors compared between the two stocks.

About Arrow Electronics

Arrow Electronics, Inc. provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Global Components and Global Enterprise Computing Solutions. The Global Components segment markets and distributes electronic components comprising semiconductor products and related services; interconnect, passive, and electromechanical products, including capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; and computing and memory products, as well as other products and services. The Global Enterprise Computing Solutions segment offers computing solutions, such as datacenter, cloud, security, and analytics solutions. This segment also provides access to various services, including engineering and integration support, warehousing and logistics, marketing resources, and authorized hardware and software training. The company serves original equipment manufacturers, value-added resellers, managed service providers, contract manufacturers, and other commercial customers. Arrow Electronics, Inc. was founded in 1935 and is based in Centennial, Colorado.

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.