RF Industries (NASDAQ:RFIL) & ScanSource (NASDAQ:SCSC) Head to Head Review

ScanSource (NASDAQ:SCSC) and RF Industries (NASDAQ:RFIL) are both small-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Volatility & Risk

ScanSource has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, RF Industries has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.

Institutional & Insider Ownership

97.9% of ScanSource shares are owned by institutional investors. Comparatively, 23.5% of RF Industries shares are owned by institutional investors. 3.2% of ScanSource shares are owned by company insiders. Comparatively, 20.4% of RF Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares ScanSource and RF Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ScanSource	2.44%	10.10%	5.11%
RF Industries	2.83%	15.32%	7.80%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for ScanSource and RF Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ScanSource	0	2	1	1	2.75
RF Industries	0	2	2	0	2.50

ScanSource currently has a consensus target price of $51.00, indicating a potential downside of 15.94%. RF Industries has a consensus target price of $14.50, indicating a potential upside of 81.02%. Given RF Industries’ higher probable upside, analysts plainly believe RF Industries is more favorable than ScanSource.

Earnings & Valuation

This table compares ScanSource and RF Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ScanSource	$3.23 billion	0.38	$78.87 million	$3.66	16.58
RF Industries	$86.31 million	1.01	$80,000.00	$0.22	36.41

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

Summary

RF Industries beats ScanSource on 9 of the 15 factors compared between the two stocks.

About ScanSource

ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, and intrusion-related devices; networking products comprising wireless and networking infrastructure products; other software-as-a-service (SaaS) products; and engages in hardware rental activities. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.

About RF Industries

RF Industries, Ltd., together with its subsidiaries, designs, manufactures, and markets interconnect products and systems in the United States, Canada, Italy, Mexico, and internationally. The company operates through two segments, RF Connector and Cable Assembly, and Custom Cabling Manufacturing and Assembly. The company designs, manufactures, and distributes various coaxial connectors and cable assemblies that are integrated with coaxial connectors; custom copper and fiber cable assemblies, complex hybrid fiber optic and power solution cables, adapters, and electromechanical wiring harnesses for communication, computer, LAN, automotive, and medical equipment; energy-efficient cooling systems for wireless base stations and remote equipment shelters; and custom-designed pole-ready 5G small cell integrated enclosures. It also designs and manufactures cable assemblies and wiring harnesses for blue chip industrial, oilfield, instrumentation, medical, and military customers; connectivity solutions to telecommunications and data communications distributors; thermal control systems; and radio frequency and microwave distribution system products, such as dividers, directional couplers, and filters. The company sells its products through warehousing distributors and in-house marketing and sales team. It serves telecommunications carriers and equipment manufacturers, wireless and network infrastructure carriers, and original equipment manufacturers. The company was formerly known as Celltronics, Inc. and changed its name RF Industries, Ltd. in November 1990. RF Industries, Ltd. was incorporated in 1979 and is headquartered in San Diego, California.