Reviewing Richardson Electronics (RELL) and Arrow Electronics (ARW)

Arrow Electronics (NYSE:ARW) and Richardson Electronics (NASDAQ:RELL) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Risk and Volatility

Arrow Electronics has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Richardson Electronics has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Institutional and Insider Ownership

93.2% of Arrow Electronics shares are owned by institutional investors. Comparatively, 43.6% of Richardson Electronics shares are owned by institutional investors. 1.3% of Arrow Electronics shares are owned by company insiders. Comparatively, 35.6% of Richardson Electronics shares are owned by company 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.

Earnings and Valuation

This table compares Arrow Electronics and Richardson Electronics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arrow Electronics $26.81 billion 0.24 $401.96 million $7.56 9.88
Richardson Electronics $163.21 million 0.57 $3.82 million N/A N/A

Arrow Electronics has higher revenue and earnings than Richardson Electronics.

Profitability

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

Net Margins Return on Equity Return on Assets
Arrow Electronics 1.84% 15.12% 4.70%
Richardson Electronics 2.56% 2.12% 1.76%

Dividends

Richardson Electronics pays an annual dividend of $0.24 per share and has a dividend yield of 3.3%. Arrow Electronics does not pay a dividend.

Analyst Ratings

This is a summary of recent ratings for Arrow Electronics and Richardson Electronics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arrow Electronics 0 2 3 1 2.83
Richardson Electronics 0 0 0 0 N/A

Arrow Electronics currently has a consensus target price of $86.00, suggesting a potential upside of 15.13%. Given Arrow Electronics’ higher possible upside, analysts plainly believe Arrow Electronics is more favorable than Richardson Electronics.

Summary

Arrow Electronics beats Richardson Electronics on 9 of the 14 factors compared between the two stocks.

About Arrow Electronics

Arrow Electronics, Inc. provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions worldwide. The company operates in two segments, Global Components and Global Enterprise Computing Solutions. The Global Components segment markets and distributes semiconductor products and related services; passive, electro-mechanical, and interconnect products consisting primarily of capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; and computing and memory products, as well as other products and services. The Global Enterprise Computing Solutions segment offers computing solutions, including data-center, cloud, security, and analytics solutions. This segment provides access to various services, including engineering and integration support, warehousing and logistics, marketing resources, and authorized hardware and software training. The company serves original equipment manufacturers, value-added resellers, managed service providers, contract manufacturers, and other commercial customers. It has a strategic alliance with AECOM. Arrow Electronics, Inc. was founded in 1935 and is based in Centennial, Colorado.

About Richardson Electronics

Richardson Electronics, Ltd. engages in power and microwave technologies, customized display solutions, and healthcare equipment businesses in North America, the Asia Pacific, Europe, and Latin America. The company's Power and Microwave Technologies Group segment provides engineered solutions, power grid and microwave tubes, and related consumables; high value flat panel detector solutions, replacement parts, tubes and service training for diagnostic imaging equipment; and customized display solutions, as well as power conversion and RF and microwave components for broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology applications. Its products are used to control, switch, or amplify electrical power signals, as well as are used as display devices in alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. This segment also offers technical services for microwave and industrial equipment. The company's Canvys segment provides custom display solutions, such as touch screens, protective panels, custom enclosures, specialized cabinet finishes, application specific software packages, and certification services to corporate enterprise, financial, healthcare, industrial, and medical original equipment manufacturer markets. Its Healthcare segment manufactures, refurbishes, and distributes diagnostic imaging replacement parts, including CT and MRI systems and tubes, hydrogen thyratrons, klystrons, and magnetrons; flat panel detector upgrades; and additional replacement solutions. This segment serves hospitals, medical centers, asset management companies, independent service organizations, and multi-vendor service providers. The company was founded in 1947 and is headquartered in LaFox, Illinois.

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