PCM (NASDAQ: PCMI) and Systemax (NYSE:SYX) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Insider & Institutional Ownership

62.6% of PCM shares are held by institutional investors. Comparatively, 25.2% of Systemax shares are held by institutional investors. 24.0% of PCM shares are held by insiders. Comparatively, 69.6% of Systemax shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Systemax pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. PCM does not pay a dividend. Systemax pays out -114.3% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and price targets for PCM and Systemax, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PCM 0 0 2 0 3.00
Systemax 0 0 1 0 3.00

PCM currently has a consensus target price of $33.50, suggesting a potential upside of 153.79%. Systemax has a consensus target price of $31.00, suggesting a potential upside of 20.39%. Given PCM’s higher probable upside, analysts plainly believe PCM is more favorable than Systemax.

Risk & Volatility

PCM has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Systemax has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500.

Earnings and Valuation

This table compares PCM and Systemax’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PCM $2.26 billion 0.07 $45.75 million $1.29 10.23
Systemax $1.71 billion 0.56 $42.30 million ($0.35) -73.57

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

Profitability

This table compares PCM and Systemax’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PCM 0.73% 17.32% 3.51%
Systemax -0.87% 12.27% 5.14%

Summary

PCM beats Systemax on 9 of the 14 factors compared between the two stocks.

About PCM

PCM, Inc. is a multi-vendor provider of technology solutions, including hardware products, software and services, offered through its dedicated sales force, field and internal service teams, direct marketing channels, and owned and operated data centers. The Company’s segments include Commercial, Public Sector and Canada. The Commercial segment sells complex technology solutions to commercial businesses in the United States. It sells its products using multiple sales channels, including a field relationship-based selling model, an outbound phone-based sales force, a field services organization and an online extranet. The Public Sector segment consists of sales made to federal, state and local governments, as well as educational institutions. The Public Sector segment utilizes a phone and field relationship-based selling model, as well as contract and bid business development teams and an online extranet. The Canada segment consists of sales made to customers in the Canadian market.

About Systemax

Systemax Inc. is a direct marketer of brand name and private label products. The Company’s segments are Industrial Products Group (IPG), EMEA Technology Products Group (EMEA), and Corporate and Other (Corporate). The IPG segment sells an array of maintenance, repair and operational (MRO) products, which are marketed in North America. The Company offers a selection of products that are manufactured for its own design and marketed under the trademarks: Global, GlobalIndustrial.com, Nexel Relius, Paramount and Interion. EMEA sells products categorized as Information and Communications Technology (ICT) and Consumer Electronics (CE), as well as related technical services, such as configuration, implementation, network security, and other technical services. CE products include television and video; audio; cameras and surveillance; Global Positioning System (GPS); cell phones; video games, and home and electronics accessories.

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