Reviewing Sanmina (NASDAQ:SANM) & Arrow Electronics (NYSE:ARW)

Arrow Electronics (NYSE:ARW) and Sanmina (NASDAQ:SANM) are both large-cap technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Arrow Electronics and Sanmina, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arrow Electronics	1	1	3	1	2.67
Sanmina	0	2	2	1	2.80

Arrow Electronics presently has a consensus target price of $233.25, suggesting a potential upside of 7.26%. Sanmina has a consensus target price of $198.33, suggesting a potential downside of 3.45%. Given Arrow Electronics’ higher probable upside, equities analysts plainly believe Arrow Electronics is more favorable than Sanmina.

Profitability

This table compares Arrow Electronics and Sanmina’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arrow Electronics	2.26%	13.41%	2.83%
Sanmina	2.41%	19.08%	5.75%

Earnings & Valuation

This table compares Arrow Electronics and Sanmina”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arrow Electronics	$30.85 billion	0.36	$571.27 million	$15.65	13.90
Sanmina	$8.13 billion	1.35	$245.89 million	$5.59	36.75

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

Insider and Institutional Ownership

99.3% of Arrow Electronics shares are held by institutional investors. Comparatively, 92.7% of Sanmina shares are held by institutional investors. 0.8% of Arrow Electronics shares are held by insiders. Comparatively, 3.1% of Sanmina shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Arrow Electronics has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Sanmina has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500.

Summary

Sanmina beats Arrow Electronics on 8 of the 14 factors compared between the two stocks.

About Arrow Electronics

Arrow Electronics, Inc. provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Global Components and Global Enterprise Computing Solutions. The Global Components segment markets and distributes electronic components comprising semiconductor products and related services; interconnect, passive, and electromechanical products, including capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; and computing and memory products, as well as other products and services. The Global Enterprise Computing Solutions segment offers computing solutions, such as datacenter, cloud, security, and analytics solutions. This segment also provides access to various services, including engineering and integration support, warehousing and logistics, marketing resources, and authorized hardware and software training. The company serves original equipment manufacturers, value-added resellers, managed service providers, contract manufacturers, and other commercial customers. Arrow Electronics, Inc. was founded in 1935 and is based in Centennial, Colorado.

About Sanmina

Sanmina Corporation provides integrated manufacturing solutions, components, products and repair, logistics, and after-market services worldwide. It operates in two businesses, Integrated Manufacturing Solutions; and Components, Products and Services. The company offers product design and engineering, including concept development, detailed design, prototyping, validation, preproduction, manufacturing design release, and product industrialization; assembly and test services; direct order fulfillment and logistics services; after-market product service and support; and supply chain management services, as well as engages in the manufacturing of components, subassemblies, and complete systems. In addition, the company provides components, such as printed circuit boards, backplane and backplane assemblies, cable assemblies, fabricated metal parts, precision machined parts, and plastic injected molded parts; memory solutions; storage platforms; optical, radio frequency, and microelectronic solutions; defense and aerospace product, design, manufacturing, repair, and refurbishment services; and cloud-based manufacturing execution software. It offers its products and services primarily to original equipment manufacturers in the industrial, medical, defense and aerospace, automotive, communications networks, and cloud solutions. Sanmina Corporation was incorporated in 1980 and is headquartered in San Jose, California.