Head to Head Contrast: Arrow Electronics (NYSE:ARW) and Advanced Energy Industries (NASDAQ:AEIS)

Arrow Electronics (NYSE:ARW) and Advanced Energy Industries (NASDAQ:AEIS) are both large-cap technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Valuation and Earnings

This table compares Arrow Electronics and Advanced Energy Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arrow Electronics	$35.92 billion	0.34	$571.27 million	$15.65	15.47
Advanced Energy Industries	$2.04 billion	5.98	$148.40 million	$5.36	56.77

Arrow Electronics has higher revenue and earnings than Advanced Energy Industries. Arrow Electronics is trading at a lower price-to-earnings ratio than Advanced Energy Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Arrow Electronics and Advanced Energy Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arrow Electronics	2.26%	13.41%	2.83%
Advanced Energy Industries	10.77%	20.75%	10.39%

Analyst Recommendations

This is a summary of current ratings for Arrow Electronics and Advanced Energy Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arrow Electronics	1	1	3	1	2.67
Advanced Energy Industries	0	2	11	1	2.93

Arrow Electronics currently has a consensus target price of $233.25, suggesting a potential downside of 3.66%. Advanced Energy Industries has a consensus target price of $409.50, suggesting a potential upside of 34.58%. Given Advanced Energy Industries’ stronger consensus rating and higher probable upside, analysts clearly believe Advanced Energy Industries is more favorable than Arrow Electronics.

Volatility and Risk

Arrow Electronics has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Advanced Energy Industries has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Insider and Institutional Ownership

99.3% of Arrow Electronics shares are owned by institutional investors. Comparatively, 99.7% of Advanced Energy Industries shares are owned by institutional investors. 0.8% of Arrow Electronics shares are owned by company insiders. Comparatively, 1.3% of Advanced Energy Industries shares are owned by company 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.

Summary

Advanced Energy Industries beats Arrow Electronics on 11 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 in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Global Components and Global Enterprise Computing Solutions. The Global Components segment markets and distributes electronic components comprising semiconductor products and related services; interconnect, passive, and electromechanical products, including 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, such as datacenter, cloud, security, and analytics solutions. This segment also 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. Arrow Electronics, Inc. was founded in 1935 and is based in Centennial, Colorado.

About Advanced Energy Industries

Advanced Energy Industries, Inc. provides precision power conversion, measurement, and control solutions in the United States and internationally. The company's plasma power products offer solutions to enable innovation for semiconductor and thin film plasma processes, such as dry etch and deposition. It also provides high and low voltage power products used in a range of applications, such as semiconductor equipment, industrial production, medical and life science equipment, data centers computing, networking, and telecommunications. In addition, the company supplies sensing, controls, and instrumentation products for advanced measurement and calibration of power and temperature. Further, the company provides calibration, conversions, upgrades, and refurbishments and used equipment to companies, as well as repair services. Further, it offers warranty and after-market repair services. It offers its products through a direct sales force, independent sales representatives, channel partners, and distributors. Advanced Energy Industries, Inc. was incorporated in 1981 and is headquartered in Denver, Colorado.