AgroFresh Solutions (NASDAQ: AGFS) and CDW (NASDAQ:CDW) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.

Analyst Ratings

This is a breakdown of current ratings for AgroFresh Solutions and CDW, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AgroFresh Solutions 0 1 0 0 2.00
CDW 1 3 5 1 2.60

AgroFresh Solutions currently has a consensus price target of $8.00, suggesting a potential upside of 12.52%. CDW has a consensus price target of $66.72, suggesting a potential downside of 4.79%. Given AgroFresh Solutions’ higher possible upside, equities research analysts clearly believe AgroFresh Solutions is more favorable than CDW.

Dividends

CDW pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. AgroFresh Solutions does not pay a dividend. CDW pays out 31.1% of its earnings in the form of a dividend.

Insider and Institutional Ownership

72.6% of AgroFresh Solutions shares are held by institutional investors. Comparatively, 90.8% of CDW shares are held by institutional investors. 15.2% of AgroFresh Solutions shares are held by company insiders. Comparatively, 2.6% of CDW shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares AgroFresh Solutions and CDW’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AgroFresh Solutions $159.67 million 2.24 -$111.56 million ($1.40) -5.08
CDW $13.98 billion 0.77 $424.40 million $2.70 25.96

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

Volatility and Risk

AgroFresh Solutions has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, CDW has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Profitability

This table compares AgroFresh Solutions and CDW’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AgroFresh Solutions -42.54% 0.19% 0.07%
CDW 2.90% 62.71% 8.12%

Summary

CDW beats AgroFresh Solutions on 12 of the 17 factors compared between the two stocks.

About AgroFresh Solutions

AgroFresh Solutions, Inc., formerly Boulevard Acquisition Corp., is a developer of agricultural technologies that preserve the freshness and value of fresh produce, including apples, pears, kiwifruit, avocados and bananas, as well as flowers. The Company’s principal product, The SmartFresh Quality System (SmartFresh), regulates the post-harvest ripening effects of ethylene, the naturally occurring plant hormone that triggers ripening in certain fruits and vegetables, through technology. SmartFresh is naturally biodegradable and leaves no detectable residue, which has significant consumer appeal. SmartFresh allows growers and packers to deliver just harvested freshness on a year-round basis. An integral part of the SmartFresh sales process is the AgroFresh Whole Product offering, which is a direct service model that provides customers with on-site applications of SmartFresh at their storage facilities combined with advisory services. The Company operates in approximately 40 countries.

About CDW

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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