Analyzing PC Connection (NASDAQ:CNXN) & Electro-Sensors (NASDAQ:ELSE)

PC Connection (NASDAQ:CNXN) and Electro-Sensors (NASDAQ:ELSE) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Profitability

This table compares PC Connection and Electro-Sensors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PC Connection	3.21%	10.90%	7.29%
Electro-Sensors	2.42%	1.73%	1.62%

Analyst Ratings

This is a breakdown of current ratings and price targets for PC Connection and Electro-Sensors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PC Connection	0	0	1	1	3.50
Electro-Sensors	0	1	0	0	2.00

Earnings and Valuation

This table compares PC Connection and Electro-Sensors”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PC Connection	$2.87 billion	0.78	$83.72 million	$3.78	23.63
Electro-Sensors	$10.48 million	2.61	$310,000.00	$0.08	96.75

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

Insider and Institutional Ownership

42.8% of PC Connection shares are owned by institutional investors. Comparatively, 11.7% of Electro-Sensors shares are owned by institutional investors. 56.6% of PC Connection shares are owned by insiders. Comparatively, 13.3% of Electro-Sensors shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

PC Connection has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Electro-Sensors has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Dividends

PC Connection pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. Electro-Sensors pays an annual dividend of $0.16 per share and has a dividend yield of 2.1%. PC Connection pays out 21.2% of its earnings in the form of a dividend. Electro-Sensors pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PC Connection has raised its dividend for 2 consecutive years.

Summary

PC Connection beats Electro-Sensors on 14 of the 17 factors compared between the two stocks.

About PC Connection

PC Connection, Inc., together with its subsidiaries, provides a range of information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions. It offers IT products, such as computer systems, software and peripheral equipment, networking communications, and other products and accessories. The company also provides services comprising design, configuration, and implementation of IT solutions. In addition, publishes Connected, a quarterly publication that provides informative articles on the latest technologies and industry trends; distributes specialty catalogs to education, healthcare, and government customers; and MacConnection that publishes a catalog for the Apple market. The company markets its products and services through its Websites, such as connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses (SMBs) comprising small office/home offices customers; government and educational institutions; and medium-to-large corporate accounts through outbound telemarketing and field sales and marketing programs targeted to specific customer populations, as well as through digital, Web, and print media advertising. PC Connection, Inc. was founded in 1982 and is headquartered in Merrimack, New Hampshire.

About Electro-Sensors

Electro-Sensors, Inc. engages in the manufacture and selling of industrial production monitoring and process control systems. Its products include shaft speed witches; wireless hazard monitoring; temperature sensor; slide gate and angle position; bearing sensors and belt alignment; and motor drive control. The company was founded by James P. Slattery in 1965 and is headquartered in Minnetonka, MN.