ScanSource (NASDAQ: SCSC) and Key Tronic (NASDAQ:KTCC) are both small-cap industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.
Earnings and Valuation
This table compares ScanSource and Key Tronic’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ScanSource||$3.57 billion||0.25||$69.24 million||$2.30||15.50|
|Key Tronic||$467.80 million||0.17||$5.61 million||$0.39||18.46|
This table compares ScanSource and Key Tronic’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and recommmendations for ScanSource and Key Tronic, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ScanSource currently has a consensus price target of $48.50, suggesting a potential upside of 36.04%. Given ScanSource’s higher probable upside, equities analysts plainly believe ScanSource is more favorable than Key Tronic.
Risk & Volatility
ScanSource has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Key Tronic has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500.
Institutional and Insider Ownership
94.4% of ScanSource shares are owned by institutional investors. Comparatively, 42.0% of Key Tronic shares are owned by institutional investors. 2.4% of ScanSource shares are owned by company insiders. Comparatively, 7.2% of Key Tronic shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
ScanSource beats Key Tronic on 10 of the 12 factors compared between the two stocks.
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 Key Tronic
Key Tronic Corporation, doing business as KeyTronicEMS Co., is engaged in contract manufacturing for a range of products. The Company provides electronic manufacturing services (EMS) and solutions to original equipment manufacturers (OEMs) of a range of products. The Company provides engineering services, procurement and distribution, materials management, manufacturing and assembly services, in-house testing, and customer service. The Company provides EMS services, such as product design, surface mount technologies (SMT) and pin through hole capability for printed circuit board assembly (PCBA), tool making, precision plastic molding, sheet metal fabrication, liquid injection molding, complex assembly, automated tape winding, prototype design and full product assembly. The Company’s manufacturing operations are located in Oakdale, Minnesota; Fayetteville, Arkansas; Corinth, Mississippi; Harrodsburg, Kentucky, and foreign manufacturing operations in Juarez, Mexico, and Shanghai, China.
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