Financial Review: Murata Manufacturing (OTCMKTS:MRAAY) & ScanSource (NASDAQ:SCSC)

ScanSource (NASDAQ:SCSC) and Murata Manufacturing (OTCMKTS:MRAAY) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.

Risk & Volatility

ScanSource has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Murata Manufacturing has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ScanSource	2.44%	10.10%	5.11%
Murata Manufacturing	13.86%	9.84%	8.39%

Valuation and Earnings

This table compares ScanSource and Murata Manufacturing”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ScanSource	$3.23 billion	0.38	$78.87 million	$3.66	16.58
Murata Manufacturing	$12.16 billion	7.40	$1.54 billion	$0.47	52.40

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

Insider & Institutional Ownership

97.9% of ScanSource shares are owned by institutional investors. Comparatively, 0.8% of Murata Manufacturing shares are owned by institutional investors. 3.2% of ScanSource shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for ScanSource and Murata Manufacturing, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ScanSource	0	2	1	1	2.75
Murata Manufacturing	0	1	1	1	3.00

ScanSource currently has a consensus price target of $51.00, indicating a potential downside of 15.94%. Given ScanSource’s higher possible upside, research analysts clearly believe ScanSource is more favorable than Murata Manufacturing.

Summary

Murata Manufacturing beats ScanSource on 8 of the 13 factors compared between the two stocks.

About ScanSource

ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, and intrusion-related devices; networking products comprising wireless and networking infrastructure products; other software-as-a-service (SaaS) products; and engages in hardware rental activities. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.

About Murata Manufacturing

Murata Manufacturing Co., Ltd. designs, manufactures, and sells ceramic-based passive electronic components and solutions in Japan and internationally. The company offers capacitors, inductors, noise suppression products/EMI suppression filters/ESD protection devices, resistors, thermistors, sensors, timing devices, quartz devices, sound components, power products, batteries, micro mechatronics, RFID product, baluns, couplers, filters, phase shifters, RF switches, front-end modules, SAW components, connectors, antennas, connectivity modules, wireless connectivity platforms, ionizers/active oxygen modules, and transformers. It also offers Femtet, a CAE software that solves various engineering challenges; and provides silver oxide battery. In addition, the company provides connectivity, Wifi sensing, IOT, AI, and RFID solutions. Murata Manufacturing Co., Ltd. offers its products for use in communications equipment, mobility, enterprise system, industrial, healthcare, medical, personal electronics applications, and other sectors. The company was founded in 1944 and is headquartered in Nagaokakyo, Japan.