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

Institutional and Insider Ownership

78.7% of Marvell Technology Group shares are held by institutional investors. Comparatively, 92.7% of Arrow Electronics shares are held by institutional investors. 6.8% of Marvell Technology Group shares are held by company insiders. Comparatively, 1.2% of Arrow Electronics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Marvell Technology Group and Arrow Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marvell Technology Group 16.53% 11.93% 10.31%
Arrow Electronics 2.00% 13.63% 4.48%

Volatility and Risk

Marvell Technology Group has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Arrow Electronics has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Dividends

Marvell Technology Group pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Arrow Electronics does not pay a dividend. Marvell Technology Group pays out 42.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and price targets for Marvell Technology Group and Arrow Electronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marvell Technology Group 0 7 17 0 2.71
Arrow Electronics 0 1 1 0 2.50

Marvell Technology Group currently has a consensus target price of $24.36, suggesting a potential upside of 4.05%. Arrow Electronics has a consensus target price of $83.50, suggesting a potential upside of 0.91%. Given Marvell Technology Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe Marvell Technology Group is more favorable than Arrow Electronics.

Valuation and Earnings

This table compares Marvell Technology Group and Arrow Electronics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marvell Technology Group $2.32 billion 4.96 $21.15 million $0.57 41.07
Arrow Electronics $23.83 billion 0.31 $522.75 million $5.68 14.57

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

Summary

Marvell Technology Group beats Arrow Electronics on 9 of the 16 factors compared between the two stocks.

Marvell Technology Group Company Profile

Marvell Technology Group Ltd. is a semiconductor provider of application-specific standard products. The Company is engaged in the design, development and sale of integrated circuits. The Company develops System-on-a-Chip (SoC) devices. It also develops integrated hardware platforms along with software that incorporates digital computing technologies designed and configured to provide an optimized computing solution. Its product portfolio includes devices for storage, networking and connectivity. In storage, it is engaged in data storage controller solutions spanning consumer, mobile, desktop and enterprise markets. Its storage solutions enable customers to engineer products for hard disk drives and solid state drives. Its networking products address end markets in cloud, enterprise, small and medium business and service provider networks. The Company’s connectivity products address end markets in consumer, enterprise, desktop, service provider networks and automotive.

Arrow Electronics Company Profile

Arrow Electronics, Inc. is a provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. The Company has a portfolio of product offerings available from various electronic components and enterprise computing solutions suppliers. The Company’s segments include the global components business; the global enterprise computing solutions (ECS) business, and corporate business segment. It distributes electronic components to original equipment manufacturers and contract manufacturers through its global components business segment. Through global ECS business segment, it provides enterprise computing solutions to value-added resellers. The Global components segment markets and distributes electronic components and provides a range of value-added capabilities. Global ECS’ portfolio of computing solutions includes datacenter, cloud, security, and analytics solutions.

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