Jabil (NYSE:JBL – Get Free Report) and CDW (NASDAQ:CDW – Get Free Report) are both large-cap technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.
Profitability
This table compares Jabil and CDW’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Jabil | 2.57% | 83.93% | 5.65% |
| CDW | 4.60% | 50.61% | 7.91% |
Earnings and Valuation
This table compares Jabil and CDW”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Jabil | $29.80 billion | 1.31 | $657.00 million | $8.01 | 46.35 |
| CDW | $22.42 billion | 0.79 | $1.07 billion | $8.32 | 17.07 |
CDW has lower revenue, but higher earnings than Jabil. CDW is trading at a lower price-to-earnings ratio than Jabil, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
93.4% of Jabil shares are held by institutional investors. Comparatively, 93.2% of CDW shares are held by institutional investors. 1.4% of Jabil shares are held by insiders. Comparatively, 0.8% of CDW shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of recent recommendations and price targets for Jabil and CDW, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Jabil | 0 | 0 | 8 | 2 | 3.20 |
| CDW | 0 | 3 | 5 | 1 | 2.78 |
Jabil presently has a consensus target price of $453.67, suggesting a potential upside of 22.20%. CDW has a consensus target price of $147.00, suggesting a potential upside of 3.48%. Given Jabil’s stronger consensus rating and higher possible upside, research analysts clearly believe Jabil is more favorable than CDW.
Risk & Volatility
Jabil has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, CDW has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.
Dividends
Jabil pays an annual dividend of $0.32 per share and has a dividend yield of 0.1%. CDW pays an annual dividend of $2.52 per share and has a dividend yield of 1.8%. Jabil pays out 4.0% of its earnings in the form of a dividend. CDW pays out 30.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CDW has raised its dividend for 10 consecutive years. CDW is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Jabil beats CDW on 12 of the 18 factors compared between the two stocks.
About Jabil
Jabil Inc. provides manufacturing services and solutions worldwide. It operates in two segments, Electronics Manufacturing Services and Diversified Manufacturing Services. The company offers electronics design, production, and product management services; electronic circuit design services, such as application-specific integrated circuit design, firmware development, and rapid prototyping services; and designs plastic and metal enclosures that include the electro-mechanics, such as the printed circuit board assemblies (PCBA). It also provides three-dimensional mechanical design comprising the analysis of electronic, electro-mechanical, and optical assemblies, as well as various industrial design, mechanism development, and tooling management services. In addition, the company provides computer-assisted design services consisting of PCBA design, as well as PCBA design validation and verification services; and other consulting services, such as the generation of a bill of materials, approved vendor list, and assembly equipment configuration for various PCBA designs. Further, it offers product and process validation services, such as product system, product safety, regulatory compliance, and reliability tests, as well as manufacturing test solution development services. Additionally, the company provides systems assembly, test, direct-order fulfillment, and configure-to-order services. It serves 5G, wireless and cloud, digital print and retail, industrial and semi-cap, networking and storage, automotive and transportation, connected devices, healthcare and packaging, and mobility industries. The company was formerly known as Jabil Circuit, Inc. and changed its name to Jabil Inc. in June 2017. Jabil Inc. was founded in 1966 and is headquartered in Saint Petersburg, Florida.
About CDW
CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products and services, as well as integrated IT solutions, including on-premise and cloud capabilities across hybrid infrastructure, digital experience, and security. It also provides hardware products comprising notebooks/mobile devices, tablets, network communications, desktop computers, collaboration, data storage and servers, and others; and software products, such as cloud solutions, software assurance, application suites, security, virtualization, operating systems, and network management. In addition, the company offers advisory and design, software development, implementation, managed, professional, configuration, partner, and telecom services, as well as warranties; delivers and manages mission critical software, systems, and network solutions; and implementation and installation, and repair services to its customers through various third-party service providers. It serves government, education, and healthcare customers; and small, medium, and large business customers. CDW Corporation was founded in 1984 and is headquartered in Vernon Hills, Illinois.
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