Datalink (NASDAQ: DTLK) and CDW Corporation (NASDAQ:CDW) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
Earnings and Valuation
This table compares Datalink and CDW Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|CDW Corporation||$14.52 billion||0.64||$1.09 billion||$2.63||22.96|
CDW Corporation has higher revenue and earnings than Datalink. CDW Corporation is trading at a lower price-to-earnings ratio than Datalink, indicating that it is currently the more affordable of the two stocks.
CDW Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 1.1%. Datalink does not pay a dividend. CDW Corporation pays out 24.3% of its earnings in the form of a dividend.
This table compares Datalink and CDW Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
73.8% of Datalink shares are owned by institutional investors. Comparatively, 91.5% of CDW Corporation shares are owned by institutional investors. 11.9% of Datalink shares are owned by company insiders. Comparatively, 2.6% of CDW Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a breakdown of recent ratings and target prices for Datalink and CDW Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Datalink currently has a consensus target price of $11.25, indicating a potential upside of 0.09%. CDW Corporation has a consensus target price of $65.36, indicating a potential upside of 8.23%. Given CDW Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe CDW Corporation is more favorable than Datalink.
Volatility and Risk
Datalink has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, CDW Corporation has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.
CDW Corporation beats Datalink on 12 of the 14 factors compared between the two stocks.
Datalink Corporation is a provider of information technology (IT) services and solutions. The Company provides a full life cycle of services, including consulting, strategy, design, deploy, manage and support. The Company leverages technology from the original equipment manufacturers (OEMs) as part of its IT solutions portfolio. Its portfolio of solutions and services spans approximately four areas, such as cloud, data center transformation, next-generation technology and security. The Company’s cloud services provide a foundation for services delivery models, such as IT as a service (ITaaS). These services include assessment and readiness workshops, security and migration strategies, automation, orchestration, Datalink Cloud Complete, DR Testing and X (anything) As A Service (XaaS). Its data center transformation portfolio includes technical infrastructure strategy and roadmaps, cloud strategies, IT process and management, IT operational outsourcing and managed services strategies.
About CDW Corporation
CDW Corporation (CDW) is a provider of integrated information technology (IT) solutions in the United States, Canada and the United Kingdom. The Company’s segments include Corporate, Public and Other. The Corporate segment consists of private sector business customers in the United States based on employee size between Medium/Large customers, which primarily includes organizations with more than 100 employees, and Small Business customers, which primarily includes organizations with up to 100 employees. Its Public segment comprises government agencies and education and healthcare institutions in the United States. Its Other segment includes Canada and CDW UK. The CDW Advanced Services business consists primarily of customized engineering services delivered by technology specialists and engineers, and managed services that include Infrastructure as a Service (IaaS) offerings. The Company has centralized logistics and headquarters functions that provide services to the segments.
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