ScanSource (NASDAQ: SCSC) and Logitech International (NASDAQ:LOGI) are both industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for ScanSource and Logitech International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ScanSource 0 2 0 0 2.00
Logitech International 0 1 4 0 2.80

ScanSource currently has a consensus price target of $48.50, suggesting a potential upside of 8.26%. Logitech International has a consensus price target of $38.80, suggesting a potential upside of 7.00%. Given ScanSource’s higher probable upside, research analysts plainly believe ScanSource is more favorable than Logitech International.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ScanSource $3.57 billion 0.32 $118.92 million $2.72 16.47
Logitech International $2.27 billion 2.62 $251.67 million $1.24 29.24

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

Profitability

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

Net Margins Return on Equity Return on Assets
ScanSource 1.94% 8.76% 4.15%
Logitech International 9.15% 25.18% 13.82%

Volatility and Risk

ScanSource has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Logitech International has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.

Institutional & Insider Ownership

94.0% of ScanSource shares are held by institutional investors. Comparatively, 37.8% of Logitech International shares are held by institutional investors. 3.0% of ScanSource shares are held by insiders. Comparatively, 2.2% of Logitech International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Logitech International pays an annual dividend of $2.47 per share and has a dividend yield of 6.8%. ScanSource does not pay a dividend. Logitech International pays out 199.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Logitech International beats ScanSource on 9 of the 16 factors compared between the two stocks.

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.

About Logitech International

Logitech International S.A. is a holding company. The Company designs, manufactures and markets products that allow people to connect through music, gaming, video, computing, and other digital platforms. The Company operates through peripheral segment. The Company offers its products to a network of domestic and international customers, including direct sales to retailers, e-tailers, and indirect sales through distributors. The Company’s retail network across the world includes consumer electronics distributors, retailers, mass merchandisers, specialty electronics stores, computer and telecommunications stores, value-added resellers and online merchants. Its music solutions are focused primarily on mobile speakers, including its UE BOOM family of mobile wireless speakers, its Jaybird wireless audio wearables for sports and active lifestyles, and its custom in-ear headphones. It offers a range of gaming gear for gamers, including mice, keyboards, headsets, gamepads and steering wheels.

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