Arrow Electronics (NYSE: ARW) and NXP Semiconductors N.V. (NASDAQ:NXPI) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitabiliy and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Arrow Electronics and NXP Semiconductors N.V., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arrow Electronics 0 2 2 0 2.50
NXP Semiconductors N.V. 0 15 2 1 2.22

Arrow Electronics currently has a consensus target price of $72.75, indicating a potential downside of 7.76%. NXP Semiconductors N.V. has a consensus target price of $110.83, indicating a potential downside of 1.88%. Given NXP Semiconductors N.V.’s higher possible upside, analysts clearly believe NXP Semiconductors N.V. is more favorable than Arrow Electronics.

Institutional & Insider Ownership

94.5% of Arrow Electronics shares are owned by institutional investors. Comparatively, 76.0% of NXP Semiconductors N.V. shares are owned by institutional investors. 1.2% of Arrow Electronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Arrow Electronics and NXP Semiconductors N.V.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Arrow Electronics $24.11 billion 0.29 $1.08 billion $5.46 14.45
NXP Semiconductors N.V. $9.32 billion 3.05 $2.62 billion $4.56 24.77

NXP Semiconductors N.V. has higher revenue, but lower earnings than Arrow Electronics. Arrow Electronics is trading at a lower price-to-earnings ratio than NXP Semiconductors N.V., indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Arrow Electronics has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, NXP Semiconductors N.V. has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Profitability

This table compares Arrow Electronics and NXP Semiconductors N.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arrow Electronics 2.01% 13.52% 4.49%
NXP Semiconductors N.V. 16.87% 16.15% 7.85%

Summary

NXP Semiconductors N.V. beats Arrow Electronics on 8 of the 14 factors compared between the two stocks.

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.

NXP Semiconductors N.V. Company Profile

NXP Semiconductors N.V. (NXP) is a holding company. The Company operates as a semiconductor company. The Company provides high performance mixed signal and standard product solutions. The Company’s segments are High Performance Mixed Signal (HPMS), Standard Products (SP), and Corporate and Other. Its product solutions are used in a range of end-market applications, including automotive, personal security and identification, wireless and wireline infrastructure, mobile communications, multi-market industrial, consumer and computing. It engages with global original equipment manufacturers (OEMs) and sells products in all geographic regions. NXP’s HPMS segment includes business lines, such as Automotive, Secure Identification Solutions (SIS), Secure Connected Devices (SCD), and Secure Interfaces and Infrastructure (SI&I). The Company’s SP segment supplies a range of standard semiconductor components, such as small signal discretes and power discretes.

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