QLogic (NASDAQ: QLGC) and ScanSource (NASDAQ:SCSC) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitabiliy, analyst recommendations and risk.

Analyst Recommendations

This is a summary of current ratings and target prices for QLogic and ScanSource, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QLogic 0 0 0 0 N/A
ScanSource 0 1 1 0 2.50

ScanSource has a consensus price target of $45.25, suggesting a potential upside of 13.41%. Given ScanSource’s higher possible upside, analysts clearly believe ScanSource is more favorable than QLogic.

Insider & Institutional Ownership

94.4% of ScanSource shares are owned by institutional investors. 3.0% of ScanSource shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares QLogic and ScanSource’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
QLogic N/A N/A N/A $0.75 21.43
ScanSource $3.53 billion 0.29 $109.04 million $2.48 16.09

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

Profitability

This table compares QLogic and ScanSource’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QLogic 15.71% 9.67% 8.76%
ScanSource 1.79% 8.41% 4.04%

Volatility & Risk

QLogic has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, ScanSource has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Summary

ScanSource beats QLogic on 7 of the 10 factors compared between the two stocks.

About QLogic

QLogic Corporation (QLogic), designs and supplies server and storage networking connectivity products that provide and manage computer data communication. The Company’s products facilitate the transfer of data and enable resource sharing between servers, networks and storage. Its products are used in enterprise, managed service provider, consumer Web, and cloud service provider data centers. Its products are based primarily on Fiber Channel and Ethernet technologies and are used in connection with storage networks, data networks and converged networks. Storage networks are used to provide access to storage across enterprise environments. Fibre Channel is a technology for enterprise storage networking. Data networks are used to provide workstation-to-server, server-to-server, and server-to-storage connectivity using Ethernet. Converged networks are designed to address the data center by consolidating and unifying storage and data networks, using high-speed Ethernet.

About ScanSource

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.

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