CDW (NASDAQ: CDW) and Amazon.com (NASDAQ:AMZN) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.
Risk & Volatility
CDW has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Amazon.com has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.
This table compares CDW and Amazon.com’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
This is a breakdown of current ratings and recommmendations for CDW and Amazon.com, as reported by MarketBeat.com.
||Strong Buy Ratings
CDW presently has a consensus target price of $75.50, suggesting a potential upside of 5.55%. Amazon.com has a consensus target price of $1,501.86, suggesting a potential downside of 1.68%. Given CDW’s higher possible upside, equities analysts plainly believe CDW is more favorable than Amazon.com.
Institutional and Insider Ownership
91.7% of CDW shares are owned by institutional investors. Comparatively, 60.2% of Amazon.com shares are owned by institutional investors. 2.6% of CDW shares are owned by company insiders. Comparatively, 17.0% of Amazon.com shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares CDW and Amazon.com’s revenue, earnings per share and valuation.
||Earnings Per Share
Amazon.com has higher revenue and earnings than CDW. CDW is trading at a lower price-to-earnings ratio than Amazon.com, indicating that it is currently the more affordable of the two stocks.
CDW pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. Amazon.com does not pay a dividend. CDW pays out 21.6% of its earnings in the form of a dividend.
Amazon.com beats CDW on 10 of the 16 factors compared between the two stocks.
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.
Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS) segments. It sells merchandise and content purchased for resale from vendors, as well as those offered by third-party sellers through physical stores and retail Websites, such as amazon.com, amazon.ca, amazon.com.mx, amazon.com.au, amazon.com.br, amazon.cn, amazon.fr, amazon.de, amazon.in, amazon.it, amazon.co.jp, amazon.nl, amazon.es, and amazon.co.uk. The company also manufactures and sells electronic devices, including kindle e-readers, fire tablets, fire TVs, and echo devices; and provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store. In addition, it offers programs that enable sellers to sell their products on its Websites, as well as their own branded Websites; and programs that allow authors, musicians, filmmakers, app developers, and others to publish and sell content. Further, the company provides compute, storage, database, and other AWS services, as well as fulfillment, publishing, digital content subscriptions, advertising, and co-branded credit card agreement services. Additionally, it offers Amazon Prime, a membership program, which provides free shipping of various items; access to unlimited streaming of movies and TV episodes; and other services. It serves consumers, sellers, developers, enterprises, and content creators. The company was founded in 1994 and is headquartered in Seattle, Washington.
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