Comparing Wetouch Technology (NASDAQ:WETH) & ScanSource (NASDAQ:SCSC)

Wetouch Technology (NASDAQ:WETH) and ScanSource (NASDAQ:SCSC) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Analyst Ratings

This is a summary of recent recommendations for Wetouch Technology and ScanSource, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wetouch Technology	1	0	0	0	1.00
ScanSource	0	3	0	1	2.50

ScanSource has a consensus price target of $43.00, suggesting a potential downside of 24.94%. Given ScanSource’s stronger consensus rating and higher probable upside, analysts clearly believe ScanSource is more favorable than Wetouch Technology.

Insider & Institutional Ownership

97.9% of ScanSource shares are owned by institutional investors. 0.1% of Wetouch Technology shares are owned by company insiders. Comparatively, 3.2% of ScanSource shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Wetouch Technology has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, ScanSource has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500.

Earnings & Valuation

This table compares Wetouch Technology and ScanSource”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wetouch Technology	$45.14 million	0.30	$7.16 million	$0.70	1.43
ScanSource	$3.23 billion	0.36	$78.87 million	$3.66	15.65

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

Profitability

This table compares Wetouch Technology and ScanSource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wetouch Technology	17.57%	5.94%	5.78%
ScanSource	2.44%	10.10%	5.11%

Summary

ScanSource beats Wetouch Technology on 12 of the 14 factors compared between the two stocks.

About Wetouch Technology

Wetouch Technology Inc. engages in the research, development, manufacture, sale, and servicing of medium to large sized projected capacitive touchscreens in the Peoples Republic of China, Taiwan, South Korea, and internationally. The company offers various touch panels, including glass-glass, which are primarily used in GPS/car entertainment panels in mid-size and luxury cars, industrial human-machine interface (HMI), financial and banking terminals, point of sale, and lottery machines; glass-film-film products that are used in GPS and entertainment panels, industrial HMI, financial and banking terminals, lottery, and gaming industry; plastic-glass for use in GPS/entertainment panels, motor vehicle GPS, smart home products, robots, and charging stations; and glass-films used in industrial HMI. Wetouch Technology Inc. was founded in 2011 and is based in Meishan, China.

About ScanSource

ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, and intrusion-related devices; networking products comprising wireless and networking infrastructure products; other software-as-a-service (SaaS) products; and engages in hardware rental activities. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.