WESCO International and Arrow Electronics, both listed on the New York Stock Exchange under the symbols NYSE:WCC and NYSE:ARW respectively, recently drew attention from investors examining their potential. This analysis compares the two mid-cap technology companies across various metrics, including earnings, dividends, institutional ownership, and profitability, to determine which stock may offer better value.
Performance Metrics
In terms of gross revenue, Arrow Electronics leads with $27.92 billion, while WESCO International reported $21.82 billion. However, WESCO International outperformed Arrow Electronics in net income, posting $717.60 million compared to Arrow’s $392.07 million. When examining earnings per share (EPS), WESCO International also holds the advantage at $13.22, versus Arrow Electronics’ $7.26.
Valuation ratios further highlight the differences between the two companies. WESCO International’s price-to-earnings ratio stands at 15.25, indicating it is a more affordable option relative to Arrow Electronics, which has a higher ratio of 18.36. These figures suggest that while WESCO International has lower revenue, it offers stronger earnings relative to its valuation.
Profitability and Analyst Sentiment
Profitability metrics provide additional insights into the operational efficiency of each company. WESCO International boasts a net margin of 3.30%, significantly higher than Arrow Electronics’ 1.40%. Furthermore, WESCO’s return on equity is 13.40%, compared to Arrow’s 8.97%, and its return on assets stands at 4.37% against Arrow’s 2.52%.
Analyst recommendations also favor WESCO International, which currently holds a consensus price target of $212.63, implying a potential upside of 5.49%. In contrast, Arrow Electronics has a consensus price target of $115.75, indicating a potential downside of 13.15%. Analysts attribute a stronger rating score of 3.00 to WESCO International, compared to Arrow’s score of 1.75.
Market Volatility and Ownership Insights
Assessing risk and volatility, WESCO International exhibits a beta of 1.83, suggesting its shares are 83% more volatile than the S&P 500. Arrow Electronics has a lower beta of 1.1, indicating its shares are 10% more volatile than the benchmark index.
Institutional ownership also plays a significant role in assessing stock stability. Approximately 93.8% of WESCO International shares are owned by institutional investors, while Arrow Electronics has an even higher figure of 99.3%. Insider ownership shows that 3.3% of WESCO International shares are held by insiders, compared to only 1.0% for Arrow Electronics. High institutional ownership often signals confidence in a company’s long-term growth potential.
Company Overviews
WESCO International, founded in 1922 and headquartered in Pittsburgh, Pennsylvania, provides business-to-business distribution, logistics services, and supply chain solutions across the globe. Its operations are segmented into Electrical & Electronic Solutions, Communications & Security Solutions, and Utility and Broadband Solutions, catering to a range of industries.
Arrow Electronics, established in 1935 with its headquarters in Centennial, Colorado, offers products and services to users of electronic components and enterprise computing solutions worldwide. The company operates in two main segments: Global Components and Global Enterprise Computing Solutions, serving a diverse clientele, including original equipment manufacturers and value-added resellers.
In summary, WESCO International outperforms Arrow Electronics across numerous metrics, highlighting its potential as a more favorable investment choice. With stronger earnings, better profitability ratios, and a more positive analyst outlook, investors may find WESCO to be the superior stock in this comparison.