Financial Comparison: Lianhe Sowell International Group (NASDAQ:LHSW) vs. ScanSource (NASDAQ:SCSC)

Lianhe Sowell International Group (NASDAQ:LHSW) and ScanSource (NASDAQ:SCSC) are both small-cap industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.

Valuation & Earnings

This table compares Lianhe Sowell International Group and ScanSource”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lianhe Sowell International Group	$36.54 million	0.31	$3.12 million	N/A	N/A
ScanSource	$3.04 billion	0.32	$71.55 million	$3.26	14.08

ScanSource has higher revenue and earnings than Lianhe Sowell International Group.

Profitability

This table compares Lianhe Sowell International Group and ScanSource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lianhe Sowell International Group	N/A	N/A	N/A
ScanSource	2.38%	9.35%	4.82%

Insider and Institutional Ownership

97.9% of ScanSource shares are owned by institutional investors. 3.2% of ScanSource shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Lianhe Sowell International Group and ScanSource, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lianhe Sowell International Group	1	0	0	0	1.00
ScanSource	0	3	0	0	2.00

ScanSource has a consensus target price of $43.00, indicating a potential downside of 6.32%. Given ScanSource’s stronger consensus rating and higher possible upside, analysts clearly believe ScanSource is more favorable than Lianhe Sowell International Group.

Summary

ScanSource beats Lianhe Sowell International Group on 10 of the 10 factors compared between the two stocks.

About Lianhe Sowell International Group

Lianhe Sowell International Group Ltd. is a holding company, which engages in trading of electronic products and software development. Its products include Intelligent traffic, low voltage Intelligent Integration, Industrial Intelligence, Industrial machine vision, and precision visual Al painting robot. The company was founded by Yue Zhu on April 6, 2007 and is headquartered in Shenzhen, China.

About ScanSource

ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, and intrusion-related devices; networking products comprising wireless and networking infrastructure products; other software-as-a-service (SaaS) products; and engages in hardware rental activities. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.