Critical Analysis: CDW (NASDAQ:CDW) & ClearOne (NASDAQ:CLRO)

CDW (NASDAQ:CDW) and ClearOne (NASDAQ:CLRO) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation and Earnings

This table compares CDW and ClearOne”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CDW	$22.42 billion	0.72	$1.07 billion	$8.32	15.59
ClearOne	$11.39 million	1.07	-$26.08 million	($1.15)	-3.97

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

Insider and Institutional Ownership

93.2% of CDW shares are owned by institutional investors. Comparatively, 9.6% of ClearOne shares are owned by institutional investors. 0.8% of CDW shares are owned by company insiders. Comparatively, 0.2% of ClearOne 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.

Analyst Recommendations

This is a breakdown of current recommendations for CDW and ClearOne, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CDW	0	3	5	1	2.78
ClearOne	1	0	0	0	1.00

CDW currently has a consensus target price of $150.12, suggesting a potential upside of 15.74%. Given CDW’s stronger consensus rating and higher probable upside, research analysts clearly believe CDW is more favorable than ClearOne.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CDW	4.60%	50.61%	7.91%
ClearOne	N/A	-209.91%	-118.38%

Volatility and Risk

CDW has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, ClearOne has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500.

Summary

CDW beats ClearOne on 14 of the 15 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 ClearOne

ClearOne, Inc., together with its subsidiaries, designs, develops, and sells conferencing, collaboration, and network streaming solutions for voice and visual communications in the United States and internationally. The company offers a range of audio conferencing products, including professional audio conferencing and sound-reinforcement products for use in enterprise, healthcare, education and distance learning, government, legal, and finance organizations; mid-tier premium conferencing products for smaller rooms, and small and medium businesses, which interface with video and Web conferencing systems; USB-based personal and group speakerphones that could be used with PCs, laptops, tablets, smartphones, and other portable devices; and traditional tabletop conferencing phones used in conference rooms and offices. It provides professional microphones consisting of beamforming microphones, ceiling microphones, and wireless microphones. In addition, the company offers video products, such as video conferencing and collaboration solutions; professional-grade cameras; and AV networking, which deliver the IP A/V experience by streaming time sensitive high definition audio and video, and control over TCP/IP networks. It sells its commercial products to a network of independent professional audiovisual, information technology, and telecommunications distributors, as well as systems integrators, dealers, value-added resellers, and end-users. ClearOne, Inc. was incorporated in 1983 and is headquartered in Salt Lake City, Utah.