Comparing Amphenol (NYSE:APH) & PC Connection (NASDAQ:CNXN)

Amphenol (NYSE:APH) and PC Connection (NASDAQ:CNXN) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for Amphenol and PC Connection, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amphenol	0	1	17	1	3.00
PC Connection	0	0	1	1	3.50

Amphenol presently has a consensus price target of $107.00, suggesting a potential upside of 34.90%. Given Amphenol’s higher probable upside, analysts plainly believe Amphenol is more favorable than PC Connection.

Profitability

This table compares Amphenol and PC Connection’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amphenol	17.95%	42.53%	15.11%
PC Connection	3.25%	11.38%	7.49%

Insider & Institutional Ownership

97.0% of Amphenol shares are held by institutional investors. Comparatively, 42.8% of PC Connection shares are held by institutional investors. 1.4% of Amphenol shares are held by insiders. Comparatively, 56.6% of PC Connection shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Amphenol pays an annual dividend of $0.50 per share and has a dividend yield of 0.6%. PC Connection pays an annual dividend of $0.80 per share and has a dividend yield of 1.0%. Amphenol pays out 21.7% of its earnings in the form of a dividend. PC Connection pays out 19.8% 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. PC Connection has increased its dividend for 2 consecutive years. PC Connection is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Amphenol and PC Connection”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amphenol	$23.09 billion	8.48	$4.27 billion	$2.30	34.49
PC Connection	$2.87 billion	0.73	$83.72 million	$4.05	20.60

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

Risk & Volatility

Amphenol has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, PC Connection has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Summary

Amphenol beats PC Connection on 11 of the 17 factors compared between the two stocks.

About Amphenol

Amphenol Corporation designs, manufactures and markets electrical, electronic and fiber-optic connectors, interconnect systems, antennas and sensor products. Its offerings also include cable assemblies and related components used to transmit signals and power in electronic equipment and systems. The company serves customers in a range of markets, including communications and information technology, automotive, aerospace and defense, industrial, mobile devices and data networks. Its products are used in applications such as vehicles, communications infrastructure, commercial aircraft and industrial equipment.

About PC Connection

PC Connection, Inc. is an information technology solutions provider that helps businesses, government agencies, educational institutions and other organizations select, acquire and manage technology. The company sells computers, software, networking equipment, peripherals and other IT products, alongside services such as technology deployment, configuration, logistics and support. Operating through the Connection brand and specialized channels including GovConnection, the company serves customers across the United States.