Critical Contrast: Surge Components (SPRS) versus Arrow Electronics (ARW)

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Surge Components (OTCMKTS:SPRS) and Arrow Electronics (NYSE:ARW) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Insider and Institutional Ownership

93.2% of Arrow Electronics shares are owned by institutional investors. 47.5% of Surge Components shares are owned by insiders. Comparatively, 1.3% of Arrow Electronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Surge Components 2.98% 19.14% 8.37%
Arrow Electronics 1.84% 15.12% 4.70%

Valuation and Earnings

This table compares Surge Components and Arrow Electronics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Surge Components $29.77 million 0.15 $350,000.00 N/A N/A
Arrow Electronics $26.81 billion 0.24 $401.96 million $7.56 9.72

Arrow Electronics has higher revenue and earnings than Surge Components.

Risk and Volatility

Surge Components has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Arrow Electronics has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Surge Components and Arrow Electronics, as provided by MarketBeat.com.

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

Arrow Electronics has a consensus price target of $86.00, suggesting a potential upside of 16.97%. Given Arrow Electronics’ higher possible upside, analysts plainly believe Arrow Electronics is more favorable than Surge Components.

Summary

Arrow Electronics beats Surge Components on 9 of the 13 factors compared between the two stocks.

Surge Components Company Profile

Surge Components, Inc. supplies electronic products and components in the United States. The company offers capacitors, which are electrical energy storage devices; and discrete components, such as semiconductor rectifiers, transistors, diodes, and circuit protection devices, as well as audible components, including audible transducers, buzzers, speakers, microphones, resonators, alarms, chimes, filters, and discriminators, as well as fuses, printed circuit boards, and switches. These products are used in the electronic circuitry of various products, including automobiles, telecomm, audio, cellular telephones, computers, consumer electronics, garage door openers, household appliances, power supplies, and security equipment. The company sells its products to original equipment manufacturers and distributors through independent sales representatives or organizations in the United States, Canada, China and other Asian countries, South America, and Europe. Surge Components, Inc. was founded in 1981 and is headquartered in Deer Park, New York.

Arrow Electronics Company Profile

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.

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