ScanSource (NASDAQ:SCSC) and Wayside Technology Group (NASDAQ:WSTG) are both small-cap industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Risk and Volatility

ScanSource has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Wayside Technology Group has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500.

Earnings and Valuation

This table compares ScanSource and Wayside Technology Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ScanSource $3.85 billion 0.25 $33.15 million $3.11 11.99
Wayside Technology Group $449.38 million 0.11 $5.06 million N/A N/A

ScanSource has higher revenue and earnings than Wayside Technology Group.

Insider and Institutional Ownership

94.9% of ScanSource shares are held by institutional investors. Comparatively, 48.9% of Wayside Technology Group shares are held by institutional investors. 2.6% of ScanSource shares are held by company insiders. Comparatively, 12.9% of Wayside Technology Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Wayside Technology Group pays an annual dividend of $0.68 per share and has a dividend yield of 6.1%. ScanSource does not pay a dividend.

Analyst Ratings

This is a breakdown of current ratings and price targets for ScanSource and Wayside Technology Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ScanSource 0 0 2 0 3.00
Wayside Technology Group 0 0 0 0 N/A

ScanSource presently has a consensus target price of $45.00, indicating a potential upside of 20.64%. Given ScanSource’s higher probable upside, analysts plainly believe ScanSource is more favorable than Wayside Technology Group.

Profitability

This table compares ScanSource and Wayside Technology Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ScanSource 1.11% 9.57% 4.22%
Wayside Technology Group 1.13% 14.10% 5.38%

Summary

ScanSource beats Wayside Technology Group on 8 of the 13 factors compared between the two stocks.

About ScanSource

ScanSource, Inc. distributes technology products and solutions in North America, Latin America, and Europe. It operates in two segments, Worldwide Barcode, Networking & Security (WW Barcode, Networking & Security); and Worldwide Communications & Services (WW Communications & Services). The WW Barcode, Networking & Security segment offers 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, intrusion-related, and wireless and networking infrastructure products; and video conferencing, cloud, POS portal, and other services. The WW Communications & Services segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets comprising education, healthcare, and government. It also provides professional, contact center, and infrastructure services; and distributes communications technologies, digital networks, and cyber security products. The company also offers pre-sale business tools and value-added services that include market and technology solution, education and training, product configuration tool, technical support, logistics, and channel financial services. ScanSource, Inc. was founded in 1992 and is headquartered in Greenville, South Carolina.

About Wayside Technology Group

Wayside Technology Group, Inc. operates as an information technology channel company worldwide. It operates in two segments, Lifeboat Distribution and TechXtend. The company distributes technical software and hardware to corporate and value added resellers, consultants, and systems integrators; and software, hardware, and services for corporations, government organizations, and academic institutions. It also resells computer software and hardware developed by others, as well as provides technical services to end user customers in the United States and Canada. In addition, the company offers a line of products from various publishers of software; and tools for virtualization/cloud computing, security, networking, storage and infrastructure management, application lifecycle management, and other technically sophisticated domains, as well as computer hardware. Wayside Technology Group, Inc. markets its products through own Websites, local and online seminars, Webinars, and social media, as well as direct email and printed materials. The company was formerly known as Programmer's Paradise, Inc. and changed its name to Wayside Technology Group, Inc. in August 2006. Wayside Technology Group, Inc. was founded in 1982 and is headquartered in Eatontown, New Jersey.

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