Connection (NASDAQ: CNXN) and Amazon.com (NASDAQ:AMZN) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.
Risk and Volatility
Connection has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500. Comparatively, Amazon.com has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.
This table compares Connection and Amazon.com’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Connection and Amazon.com’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Connection||$2.91 billion||0.27||$54.85 million||$1.84||16.17|
|Amazon.com||$177.87 billion||4.32||$3.03 billion||$4.55||347.64|
Amazon.com has higher revenue and earnings than Connection. Connection is trading at a lower price-to-earnings ratio than Amazon.com, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Connection and Amazon.com, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Connection presently has a consensus price target of $33.00, indicating a potential upside of 10.92%. Amazon.com has a consensus price target of $1,707.20, indicating a potential upside of 7.93%. Given Connection’s stronger consensus rating and higher possible upside, analysts clearly believe Connection is more favorable than Amazon.com.
Institutional and Insider Ownership
41.3% of Connection shares are held by institutional investors. Comparatively, 60.1% of Amazon.com shares are held by institutional investors. 57.1% of Connection shares are held by insiders. Comparatively, 16.3% of Amazon.com shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Amazon.com beats Connection on 9 of the 14 factors compared between the two stocks.
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.
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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