ScanSource (SCSC) versus HP (HPQ) Critical Analysis
ScanSource (NASDAQ: SCSC) and HP (NYSE:HPQ) are both industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.
HP pays an annual dividend of $0.53 per share and has a dividend yield of 2.7%. ScanSource does not pay a dividend. HP pays out 38.4% of its earnings in the form of a dividend.
Insider & Institutional Ownership
94.7% of ScanSource shares are owned by institutional investors. Comparatively, 79.9% of HP shares are owned by institutional investors. 3.0% of ScanSource shares are owned by company insiders. Comparatively, 0.6% of HP shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
ScanSource has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, HP has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500.
This table compares ScanSource and HP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares ScanSource and HP’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ScanSource||$3.53 billion||0.27||$109.04 million||$2.48||15.12|
|HP||$50.64 billion||0.64||$4.20 billion||$1.38||13.99|
HP has higher revenue and earnings than ScanSource. HP is trading at a lower price-to-earnings ratio than ScanSource, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and price targets for ScanSource and HP, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ScanSource currently has a consensus price target of $45.25, indicating a potential upside of 20.67%. HP has a consensus price target of $20.53, indicating a potential upside of 6.29%. Given ScanSource’s higher possible upside, equities research analysts clearly believe ScanSource is more favorable than HP.
HP beats ScanSource on 9 of the 16 factors compared between the two stocks.
ScanSource Company Profile
ScanSource, Inc. is a provider of technology products and solutions. The Company and its subsidiaries provide solutions for technology manufacturers and sell to resellers in technology markets, such as point-of-sale (POS) and Barcode, Networking and Security, Communications and Emerging Technologies. It operates through two segments: Worldwide Barcode & Security and Worldwide Communications & Services. The Barcode & Security distribution segment focuses on automatic identification and data capture (AIDC), POS, electronic physical security and three dimensional (3D) printing technologies. The Communications & Services distribution segment focuses on communications technologies and services. As of June 30, 2016, the Company marketed over 100,000 products from approximately 400 hardware and software vendors to approximately 35,000 reseller customers from distribution centers in Mississippi, Virginia, Florida, Mexico, Colombia, Brazil, Belgium, France, Germany and the United Kingdom.
HP Company Profile
HP Inc. is a provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses, and enterprises, including customers in the government, health and education sectors. The Company provides personal computing and other access devices, imaging and printing products, and related technologies, solutions and services. Its segments include Personal Systems, Printing and Corporate Investments. The Personal Systems segment provides Commercial personal computers (PCs), Consumer PCs, workstations, thin clients, Commercial tablets and mobility devices, retail point-of-sale systems, displays and other accessories, software, support and services for the commercial and consumer markets. The Printing segment provides consumer and commercial printer hardware, supplies, media, solutions and services, as well as scanning devices. The Corporate Investments segment includes the operations of HP Labs and certain business incubation projects.
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