Arrow Electronics (NYSE: ARW) and Sequans Communications (NYSE:SQNS) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.

Volatility and Risk

Arrow Electronics has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Sequans Communications has a beta of 2.41, meaning that its stock price is 141% more volatile than the S&P 500.

Valuation and Earnings

This table compares Arrow Electronics and Sequans Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arrow Electronics $23.83 billion 0.31 $522.75 million $5.68 14.83
Sequans Communications $45.58 million 3.79 -$24.78 million ($0.31) -7.03

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

Profitability

This table compares Arrow Electronics and Sequans Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arrow Electronics 2.00% 13.63% 4.48%
Sequans Communications -46.93% -256.90% -34.40%

Analyst Ratings

This is a summary of current ratings for Arrow Electronics and Sequans Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arrow Electronics 0 1 1 0 2.50
Sequans Communications 0 0 7 0 3.00

Arrow Electronics currently has a consensus price target of $83.50, suggesting a potential downside of 0.89%. Sequans Communications has a consensus price target of $3.96, suggesting a potential upside of 81.85%. Given Sequans Communications’ stronger consensus rating and higher possible upside, analysts plainly believe Sequans Communications is more favorable than Arrow Electronics.

Insider & Institutional Ownership

92.7% of Arrow Electronics shares are owned by institutional investors. Comparatively, 31.8% of Sequans Communications 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.

Summary

Arrow Electronics beats Sequans Communications on 9 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.

Sequans Communications Company Profile

Sequans Communications S.A. is a fabless designer, developer and supplier of fourth Generation long term evolution (4G LTE) semiconductor solutions for wireless broadband applications, with a specific focus on the single-mode device market. Its semiconductor solutions integrate baseband processor and radio frequency (RF) transceiver integrated circuits (ICs) along with its signal processing techniques, algorithms and software stacks. In the broadband data device market, its solutions serve as the wireless communications platform in devices, such as smartphones; Universal Serial Bus (USB) dongles; portable routers; embedded wireless modems for laptops, tablets, and other consumer multimedia devices; and customer-premises equipment, such as fixed wireless access modems, routers and residential gateways. The Company’s products include SQN3330, SQN3223, SQN3221, SQN3241, VZ120Q, VZ22Q, VZ22M, US60L, SQN3220, SQN3240, SQN3120, SQN5120, SQN3140, VZ20Q, VZ20M, SQN1210 and SQN1220.

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