PC Connection (NASDAQ: CNXN) and Electronics for Imaging (NASDAQ:EFII) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Earnings & Valuation

This table compares PC Connection and Electronics for Imaging’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PC Connection $2.86 billion 0.25 $90.07 million $1.79 14.82
Electronics for Imaging $988.02 million 1.94 $121.81 million $0.98 42.29

Electronics for Imaging has higher revenue, but lower earnings than PC Connection. PC Connection is trading at a lower price-to-earnings ratio than Electronics for Imaging, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

PC Connection has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500. Comparatively, Electronics for Imaging has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.

Profitability

This table compares PC Connection and Electronics for Imaging’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PC Connection 1.66% 11.39% 7.37%
Electronics for Imaging 4.70% 5.58% 3.07%

Analyst Ratings

This is a breakdown of current recommendations for PC Connection and Electronics for Imaging, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PC Connection 0 0 1 0 3.00
Electronics for Imaging 1 2 10 0 2.69

PC Connection presently has a consensus target price of $33.00, indicating a potential upside of 24.39%. Electronics for Imaging has a consensus target price of $51.44, indicating a potential upside of 24.14%. Given PC Connection’s stronger consensus rating and higher probable upside, research analysts clearly believe PC Connection is more favorable than Electronics for Imaging.

Insider and Institutional Ownership

41.4% of PC Connection shares are held by institutional investors. 57.3% of PC Connection shares are held by company insiders. Comparatively, 1.9% of Electronics for Imaging shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

PC Connection beats Electronics for Imaging on 9 of the 14 factors compared between the two stocks.

About PC Connection

PC Connection, Inc. is a provider of a range of information technology (IT) solutions. The Company conducts its business operations through three business segments: small- to medium-sized businesses (SMB), Large Account and Public Sector. The Company enables customers to design, enable, manage and service their IT environments. The Company’s IT products include computer systems, software and peripheral equipment, networking communications, and other products and accessories that the Company purchases from manufacturers, distributors and other suppliers. The Company also offers services involving design, configuration and implementation of IT solutions. The Company markets its products and services through its Websites, including www.connection.com, www.connection.com/enterprise, www.connection.com/publicsector, and www.macconnection.com. It uses a combination of outbound telemarketing, including some on-site sales solicitation by business development managers.

About Electronics for Imaging

Electronics For Imaging, Inc. is engaged in digital printing, focused on the transformation of the printing, packaging, ceramic tile decoration, and textile industries from the use of traditional analog-based printing to digital on-demand printing. It operates through three segments. The Industrial Inkjet segment consists of its VUTEk and Matan super-wide and wide format display graphics, Reggiani textile, Jetrion label and packaging and Cretaprint ceramic tile decoration and construction material industrial digital inkjet printers; ceramic, water-based, and thermoforming ink, and digital inkjet printer parts, and professional services. The Productivity Software segment consists of a software suite that enables automated end-to-end business and production workflows for the print and packaging industry. The Fiery segment consists of digital front ends that transform digital copiers and printers into networked printing devices for the office, industrial and commercial printing markets.

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