Critical Contrast: Hewlett Packard Enterprise (HPE) vs. PC Connection (CNXN)
Hewlett Packard Enterprise (NYSE: HPE) and PC Connection (NASDAQ:CNXN) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.
Insider and Institutional Ownership
80.2% of Hewlett Packard Enterprise shares are held by institutional investors. Comparatively, 41.4% of PC Connection shares are held by institutional investors. 0.9% of Hewlett Packard Enterprise shares are held by insiders. Comparatively, 57.3% of PC Connection shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This table compares Hewlett Packard Enterprise and PC Connection’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hewlett Packard Enterprise||0.29%||8.92%||3.67%|
Risk & Volatility
Hewlett Packard Enterprise has a beta of 2.72, suggesting that its share price is 172% more volatile than the S&P 500. Comparatively, PC Connection has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for Hewlett Packard Enterprise and PC Connection, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hewlett Packard Enterprise||2||16||11||0||2.31|
Hewlett Packard Enterprise currently has a consensus price target of $18.57, indicating a potential upside of 40.11%. PC Connection has a consensus price target of $33.00, indicating a potential upside of 28.50%. Given Hewlett Packard Enterprise’s higher probable upside, research analysts clearly believe Hewlett Packard Enterprise is more favorable than PC Connection.
Hewlett Packard Enterprise pays an annual dividend of $0.26 per share and has a dividend yield of 2.0%. PC Connection does not pay a dividend. Hewlett Packard Enterprise pays out 371.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation and Earnings
This table compares Hewlett Packard Enterprise and PC Connection’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hewlett Packard Enterprise||$48.08 billion||0.45||$7.31 billion||$0.07||189.31|
|PC Connection||$2.86 billion||0.24||$90.07 million||$1.79||14.35|
Hewlett Packard Enterprise has higher revenue and earnings than PC Connection. PC Connection is trading at a lower price-to-earnings ratio than Hewlett Packard Enterprise, indicating that it is currently the more affordable of the two stocks.
Hewlett Packard Enterprise Company Profile
Hewlett Packard Enterprise Company is a provider of technology solutions. The Company’s segments include: Enterprise Group, Software, Financial Services and Corporate Investments. The Enterprise Group segment provides its customers with the technology infrastructure they need to optimize traditional information technology (IT). The Software segment allows its customers to automate IT operations to simplify, accelerate and secure business processes and drives the analytics that turn raw data into actionable knowledge. The Financial Services segment enables flexible IT consumption models, financial architectures and customized investment solutions for its customers. The Corporate Investments segment includes Hewlett Packard Labs and certain business incubation projects, among others.
PC Connection Company Profile
PC Connection, Inc. is a provider of a range of information technology (IT) solutions. The Company conducts its business operations through three business segments: small- to medium-sized businesses (SMB), Large Account and Public Sector. The Company enables customers to design, enable, manage and service their IT environments. The Company’s IT products include computer systems, software and peripheral equipment, networking communications, and other products and accessories that the Company purchases from manufacturers, distributors and other suppliers. The Company also offers services involving design, configuration and implementation of IT solutions. The Company markets its products and services through its Websites, including www.connection.com, www.connection.com/enterprise, www.connection.com/publicsector, and www.macconnection.com. It uses a combination of outbound telemarketing, including some on-site sales solicitation by business development managers.
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