Heritage Media (OTCMKTS:OLVI) versus ScanSource (NASDAQ:SCSC) Critical Survey

ScanSource (NASDAQ:SCSC) and Heritage Media (OTCMKTS:OLVI) are both small-cap technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Insider and Institutional Ownership

97.9% of ScanSource shares are held by institutional investors. 3.2% of ScanSource shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for ScanSource and Heritage Media, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ScanSource	0	4	0	0	2.00
Heritage Media	0	0	0	0	0.00

ScanSource currently has a consensus target price of $43.00, indicating a potential downside of 23.75%. Given ScanSource’s stronger consensus rating and higher probable upside, equities research analysts clearly believe ScanSource is more favorable than Heritage Media.

Profitability

This table compares ScanSource and Heritage Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ScanSource	2.38%	9.35%	4.82%
Heritage Media	-25.04%	N/A	N/A

Valuation and Earnings

This table compares ScanSource and Heritage Media”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ScanSource	$3.04 billion	0.38	$71.55 million	$3.30	17.09
Heritage Media	$82.76 million	1.93	-$20.70 million	($0.05)	-4.98

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

Risk and Volatility

ScanSource has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Heritage Media has a beta of -2.02, meaning that its share price is 302% less volatile than the S&P 500.

Summary

ScanSource beats Heritage Media on 12 of the 13 factors compared between the two stocks.

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.

About Heritage Media

Heritage Media Corporation was formerly known as Lignin Industries Inc. Heritage Media Corporation is based in Calgary, Canada.