Synnex (SNX) versus ePlus (PLUS) Financial Analysis

Synnex (NYSE: SNX) and ePlus (NASDAQ:PLUS) are both computer and 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.

Institutional and Insider Ownership

71.9% of Synnex shares are held by institutional investors. Comparatively, 91.4% of ePlus shares are held by institutional investors. 3.2% of Synnex shares are held by insiders. Comparatively, 3.3% of ePlus 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 Synnex and ePlus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synnex 0 2 4 1 2.86
ePlus 0 1 1 0 2.50

Synnex presently has a consensus target price of $138.86, suggesting a potential upside of 33.50%. ePlus has a consensus target price of $75.00, suggesting a potential downside of 7.41%. Given Synnex’s stronger consensus rating and higher possible upside, research analysts clearly believe Synnex is more favorable than ePlus.

Dividends

Synnex pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. ePlus does not pay a dividend. Synnex pays out 15.8% of its earnings in the form of a dividend. Synnex has raised its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Synnex and ePlus’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synnex $17.05 billion 0.24 $301.17 million $8.86 11.74
ePlus $1.33 billion 0.85 $50.55 million $3.74 21.66

Synnex has higher revenue and earnings than ePlus. Synnex is trading at a lower price-to-earnings ratio than ePlus, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Synnex has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, ePlus has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Profitability

This table compares Synnex and ePlus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Synnex 1.46% 16.52% 5.58%
ePlus 4.01% 15.06% 7.34%

Summary

Synnex beats ePlus on 10 of the 18 factors compared between the two stocks.

Synnex Company Profile

SYNNEX Corporation provides business process services in North and South America, the Asia-Pacific, Europe, and internationally. It operates in two segments, Technology Solutions and Concentrix. The Technology Solutions segment distributes peripherals; information technology systems, including data center server and storage solutions; system components; software; networking/communications/security equipment; consumer electronics; and complementary products. It also provides systems design and integration solutions, build-to-order, and configure-to-order assembly capabilities; logistics services that include outsourced fulfillment, virtual distribution, and direct ship to end-users; online services; and financing services comprising net terms, third party leasing, floor plan financing, and letters of credit backed financing and arrangements. In addition, this segment offers marketing services, such as direct mail, external media advertising, reseller product training, targeted telemarketing campaigns, trade shows, trade groups, database analysis, print on demand services, and Web-based marketing. This segment serves resellers, system integrators, and retailers. The Concentrix segment offers a portfolio of strategic solutions and end-to-end business services focused on customer engagement strategy, process optimization, technology innovation, front and back-office automation, and business transformation services. This segment serves clients in various industry verticals, including automotive, banking and financial services, consumer electronics, energy and public sector, healthcare, insurance, media and communications, retail and e-commerce, and technology, as well as travel, transportation, and tourism. The company was formerly known as SYNNEX Information Technologies, Inc. and changed its name to SYNNEX Corporation in October 2003. SYNNEX Corporation was founded in 1980 and is headquartered in Fremont, California.

ePlus Company Profile

ePlus inc., an engineering-centric technology solutions provider, provides information technology (IT) products and services, flexible leasing and financing solutions, and enterprise supply management in the United States. It operates through two segments, Technology and Financing. The Technology segment sells IT products, such as hardware, software, maintenance, software assurance, and services; and offers advanced professional and managed services, including data center infrastructure, networking, security, cloud, and collaboration, as well as ePlus managed, professional, security, staff augmentation, server and desktop support, and project management services. This segment also offers proprietary software products comprising OneSource IT, an online Web based software portal for customers purchasing IT equipment, software, and services; OneSource Procurement, a Web-based software tool to facilitate procurement of various assets; OneSource Asset Management, a software platform for managing and tracking corporate assets consisting of vendor maintenance contracts; and OneSource DigitalPaper, a document management software application. The Financing segment specializes in financing arrangements, including direct financing, sales-type and operating leases, notes receivable, and consumption based financing arrangements, as well as underwriting and management of IT equipment and assets. Its financing operations comprise sales, pricing, credit, contracts, accounting, and risk and asset management. This segment primarily finances IT equipment, such as accessories and software, communication-related equipment, and medical equipment. The company serves commercial entities, state and local governments, government contractors, and educational institutions. The company was formerly known as MLC Holdings, Inc. and changed its name to ePlus inc. in 1999. ePlus inc. was founded in 1990 and is headquartered in Herndon, Virginia.

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