ZKH Group (NYSE:ZKH – Get Free Report) and Distribution Solutions Group (NASDAQ:DSGR – Get Free Report) are both small-cap industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for ZKH Group and Distribution Solutions Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ZKH Group | 1 | 0 | 0 | 0 | 1.00 |
| Distribution Solutions Group | 0 | 4 | 0 | 0 | 2.00 |
Distribution Solutions Group has a consensus price target of $35.00, suggesting a potential upside of 0.72%. Given Distribution Solutions Group’s stronger consensus rating and higher possible upside, analysts clearly believe Distribution Solutions Group is more favorable than ZKH Group.
Volatility and Risk
Insider and Institutional Ownership
9.5% of ZKH Group shares are owned by institutional investors. Comparatively, 91.6% of Distribution Solutions Group shares are owned by institutional investors. 78.8% of Distribution Solutions Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares ZKH Group and Distribution Solutions Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ZKH Group | $9.44 billion | 0.04 | -$19.44 million | ($0.01) | -291.50 |
| Distribution Solutions Group | $2.05 billion | 0.78 | $8.35 million | $0.19 | 182.89 |
Distribution Solutions Group has lower revenue, but higher earnings than ZKH Group. ZKH Group is trading at a lower price-to-earnings ratio than Distribution Solutions Group, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares ZKH Group and Distribution Solutions Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ZKH Group | -0.02% | -0.06% | -0.03% |
| Distribution Solutions Group | 0.44% | 9.33% | 3.41% |
Summary
Distribution Solutions Group beats ZKH Group on 12 of the 13 factors compared between the two stocks.
About ZKH Group
ZKH Group Limited develops and operates a maintenance, repair, and operating (MRO) products trading and service platform that offers spare parts, chemicals, manufacturing parts, general consumables, and office supplies in the People’s Republic of China. The company provides MRO procurement and management services; digitalized MRO procurement solutions; and logistics and warehousing services. It also engages in the production and sale of intelligent warehousing equipment. ZKH Group Limited was founded in 1998 and is based in Shanghai, the People’s Republic of China.
About Distribution Solutions Group
Distribution Solutions Group, Inc., a specialty distribution company, engages in the provision of value-added distribution solutions in North America, Europe, Asia, South America, and the Middle East. The company provides its solutions to the maintenance, repair, and operations (MRO); original equipment manufacturer (OEM); and industrial technology markets. It operates through three segments: Lawson, Gexpro Services, and TestEquity. The Lawson segment distributes of specialty products and services to the industrial, commercial, institutional, and government MRO market. The TestEquity segment distributes test and measurement equipment and solutions, industrial and electronic production supplies, and vendor managed inventory programs, as well as converting, fabrication, and adhesive solutions under the TestEquity, Hisco, TEquipment, Techni-Tool, Jensen Tools, and Instrumex brands. The Gexpro Services segment provides supply chain management solutions that offer VMI, kitting, global logistics management, manufacturing localization and import expertise, value engineering, and quality assurance. The company was formerly known as Lawson Products, Inc. and has changed to Distribution Solutions Group, Inc. 2022 Distribution Solutions Group, Inc. was incorporated in 1952 and is headquartered in Fort Worth, Texas.
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