Financial Review: CDW (NASDAQ:CDW) vs. Kimball Electronics (NASDAQ:KE)

CDW (NASDAQ:CDW) and Kimball Electronics (NASDAQ:KE) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CDW	4.60%	50.61%	7.91%
Kimball Electronics	1.95%	4.41%	2.35%

Insider and Institutional Ownership

93.2% of CDW shares are owned by institutional investors. Comparatively, 76.0% of Kimball Electronics shares are owned by institutional investors. 0.8% of CDW shares are owned by company insiders. Comparatively, 2.8% of Kimball Electronics shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CDW	$22.42 billion	0.86	$1.07 billion	$8.32	18.48
Kimball Electronics	$1.43 billion	0.44	$27.96 million	$1.13	23.16

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

Volatility & Risk

CDW has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Kimball Electronics has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for CDW and Kimball Electronics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CDW	0	3	5	1	2.78
Kimball Electronics	0	2	2	1	2.80

CDW currently has a consensus price target of $150.38, indicating a potential downside of 2.22%. Kimball Electronics has a consensus price target of $32.00, indicating a potential upside of 22.28%. Given Kimball Electronics’ stronger consensus rating and higher possible upside, analysts clearly believe Kimball Electronics is more favorable than CDW.

Summary

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

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.

About Kimball Electronics

Kimball Electronics, Inc. engages in the provision of electronics manufacturing, engineering, and supply chain support services to customers in the automotive, medical, and industrial end markets. The Company also offers contract manufacturing services, including engineering and supply chain support for the production of electronic assemblies and other products, including non-electronic components, medical devices, medical disposables, and precision molded plastics, as well as automation, test, and inspection equipment primarily used in automotive, medical, and industrial applications. In addition, it is also involved in the production and testing of printed circuit board assemblies, as well as clean room assembly, cold chain, and product sterilization management activities. Further, the company offers design services and support, supply chain services and support, rapid prototyping and new product introduction support, product design and process validation and qualification, industrialization and automation of manufacturing processes, reliability testing, aftermarket services, drug delivery devices and solutions with and without electronics, and product life cycle management services, as well as and assembly of medical, automotive, and industrial products. It operates in the United States, China, Mexico, Poland, Romania, Thailand, India, Japan, Vietnam, and internationally. Kimball Electronics, Inc. was founded in 1961 and is headquartered in Jasper, Indiana.