Critical Review: Overstock.com (OSTK) vs. CDW (CDW)

Overstock.com (NASDAQ: OSTK) and CDW (NASDAQ:CDW) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

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CDW pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. Overstock.com does not pay a dividend. CDW pays out 21.6% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Overstock.com and CDW’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Overstock.com $1.74 billion 0.61 -$109.87 million ($1.81) -19.81
CDW $15.19 billion 0.69 $523.00 million $3.88 17.64

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

Risk and Volatility

Overstock.com has a beta of 1.88, suggesting that its stock price is 88% more volatile than the S&P 500. Comparatively, CDW has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Overstock.com and CDW, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Overstock.com 0 0 2 0 3.00
CDW 1 3 5 0 2.44

Overstock.com currently has a consensus price target of $62.50, indicating a potential upside of 74.34%. CDW has a consensus price target of $75.50, indicating a potential upside of 10.30%. Given Overstock.com’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Overstock.com is more favorable than CDW.

Profitability

This table compares Overstock.com and CDW’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Overstock.com -6.30% -49.57% -19.40%
CDW 3.44% 65.93% 8.39%

Institutional and Insider Ownership

58.6% of Overstock.com shares are owned by institutional investors. Comparatively, 91.2% of CDW shares are owned by institutional investors. 24.2% of Overstock.com shares are owned by insiders. Comparatively, 2.6% of CDW shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

CDW beats Overstock.com on 11 of the 16 factors compared between the two stocks.

About Overstock.com

Overstock.com, Inc. is an online retailer and incubator of blockchain technology. Through its online retail business, the Company offers a range of price-competitive brand name, non-brand name and closeout products, including furniture, home decor, bedding and bath, housewares, jewelry and watches, apparel and designer accessories, health and beauty products, electronics and computers, and sporting goods. It operates Retail and Medici businesses. Its Retail business consists of its Direct and Partner segments. Its Other segment consists of Medici. The Company also sells various books, magazines, compact discs (CDs), digital versatile discs (DVDs) and video games. The Company sells these products and services through its Internet Websites located at www.overstock.com, www.o.co and www.o.biz. The Company’s other offerings include Worldstock Fair Trade, Main Street Revolution, Farmers Market, Pet Adoptions, Insurance and Supplier Oasis.

About CDW

CDW Corporation provides integrated information technology (IT) solutions to business, government, education, and healthcare customers in the United States, Canada, and the United Kingdom. It operates through three segments, Corporate, Small Business, and Public. The company offers discrete hardware and software products, as well as integrated IT solutions, including mobility, security, data center optimization, cloud computing, virtualization, and collaboration. Its hardware products comprise notebooks/mobile devices, tablets, network communications, desktop computers, video monitors, enterprise and data storage, printers, and servers; and software products include application suites, security, virtualization, operating systems, and network management. The company also provides warranties, managed services, and consulting design and implementation services. CDW Corporation was founded in 1984 and is based in Lincolnshire, Illinois.

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