Analyzing PC Connection (NASDAQ:CNXN) & Kimball Electronics (NASDAQ:KE)

Kimball Electronics (NASDAQ:KE) and PC Connection (NASDAQ:CNXN) are both technology companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Volatility and Risk

Kimball Electronics has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, PC Connection has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kimball Electronics	1.95%	4.41%	2.35%
PC Connection	3.21%	10.90%	7.29%

Valuation and Earnings

This table compares Kimball Electronics and PC Connection”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kimball Electronics	$1.43 billion	0.42	$27.96 million	$1.13	22.15
PC Connection	$2.87 billion	0.74	$83.72 million	$3.78	22.31

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

Analyst Recommendations

This is a summary of recent recommendations for Kimball Electronics and PC Connection, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kimball Electronics	0	2	2	1	2.80
PC Connection	0	0	1	1	3.50

Kimball Electronics currently has a consensus price target of $32.00, indicating a potential upside of 27.85%. Given Kimball Electronics’ higher possible upside, research analysts plainly believe Kimball Electronics is more favorable than PC Connection.

Institutional and Insider Ownership

76.0% of Kimball Electronics shares are owned by institutional investors. Comparatively, 42.8% of PC Connection shares are owned by institutional investors. 2.8% of Kimball Electronics shares are owned by company insiders. Comparatively, 56.6% of PC Connection shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

PC Connection beats Kimball Electronics on 10 of the 14 factors compared between the two stocks.

About Kimball Electronics

Kimball Electronics, Inc. engages in the provision of electronics manufacturing, engineering, and supply chain support services to customers in the automotive, medical, and industrial end markets. The Company also offers contract manufacturing services, including engineering and supply chain support for the production of electronic assemblies and other products, including non-electronic components, medical devices, medical disposables, and precision molded plastics, as well as automation, test, and inspection equipment primarily used in automotive, medical, and industrial applications. In addition, it is also involved in the production and testing of printed circuit board assemblies, as well as clean room assembly, cold chain, and product sterilization management activities. Further, the company offers design services and support, supply chain services and support, rapid prototyping and new product introduction support, product design and process validation and qualification, industrialization and automation of manufacturing processes, reliability testing, aftermarket services, drug delivery devices and solutions with and without electronics, and product life cycle management services, as well as and assembly of medical, automotive, and industrial products. It operates in the United States, China, Mexico, Poland, Romania, Thailand, India, Japan, Vietnam, and internationally. Kimball Electronics, Inc. was founded in 1961 and is headquartered in Jasper, Indiana.

About PC Connection

PC Connection, Inc., together with its subsidiaries, provides a range of information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions. It offers IT products, such as computer systems, software and peripheral equipment, networking communications, and other products and accessories. The company also provides services comprising design, configuration, and implementation of IT solutions. In addition, publishes Connected, a quarterly publication that provides informative articles on the latest technologies and industry trends; distributes specialty catalogs to education, healthcare, and government customers; and MacConnection that publishes a catalog for the Apple market. The company markets its products and services through its Websites, such as connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses (SMBs) comprising small office/home offices customers; government and educational institutions; and medium-to-large corporate accounts through outbound telemarketing and field sales and marketing programs targeted to specific customer populations, as well as through digital, Web, and print media advertising. PC Connection, Inc. was founded in 1982 and is headquartered in Merrimack, New Hampshire.