ScanSource (NASDAQ: SCSC) and Synaptics (NASDAQ:SYNA) are both small-cap industrial products companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.
Valuation & Earnings
This table compares ScanSource and Synaptics’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ScanSource||$3.53 billion||0.27||$109.04 million||$2.48||15.16|
|Synaptics||$1.72 billion||0.82||$188.60 million||$1.38||29.63|
Synaptics has higher revenue, but lower earnings than ScanSource. ScanSource is trading at a lower price-to-earnings ratio than Synaptics, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
94.4% of ScanSource shares are owned by institutional investors. Comparatively, 93.0% of Synaptics shares are owned by institutional investors. 3.0% of ScanSource shares are owned by insiders. Comparatively, 3.6% of Synaptics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares ScanSource and Synaptics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
ScanSource has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Synaptics has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.
This is a summary of recent ratings for ScanSource and Synaptics, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ScanSource currently has a consensus target price of $45.25, suggesting a potential upside of 20.35%. Synaptics has a consensus target price of $57.46, suggesting a potential upside of 40.53%. Given Synaptics’ higher probable upside, analysts clearly believe Synaptics is more favorable than ScanSource.
Synaptics beats ScanSource on 8 of the 14 factors compared between the two stocks.
ScanSource Company Profile
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.
Synaptics Company Profile
Synaptics Incorporated is engaged in the development, marketing and sale of intuitive human interface solutions for electronic devices and products. The Company is a developer and supplier of custom-designed human interface product solutions that enable people to interact with a range of mobile computing, communications, entertainment and other electronic devices. Its products include ClearPad, ClearView, TouchView, Natural ID, TouchPad, SecurePad, ClickPad and ForcePad. Its other product solutions include dual pointing solutions, TouchStyk, and TouchButtons. Its dual pointing solutions offer TouchPad with a pointing stick in a single notebook computer, enabling users to select their interface of choice. TouchStyk is a self-contained pointing stick module that uses capacitive technology similar to that used in its TouchPad. TouchButtons provide capacitive buttons and scrolling controls for an interface solution designed to replace mechanical buttons.
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