Analyzing Best Buy Co. (BBY) and Tech Data Corporation (TECD)

Best Buy Co. (NYSE: BBY) and Tech Data Corporation (NASDAQ:TECD) are both mid-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitabiliy, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Profitability

This table compares Best Buy Co. and Tech Data Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Best Buy Co.	3.01%	26.81%	8.73%
Tech Data Corporation	0.69%	11.67%	3.32%

Analyst Recommendations

This is a summary of current ratings and price targets for Best Buy Co. and Tech Data Corporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Best Buy Co.	3	2	17	0	2.64
Tech Data Corporation	0	2	4	0	2.67

Best Buy Co. currently has a consensus price target of $58.50, suggesting a potential upside of 1.49%. Tech Data Corporation has a consensus price target of $106.60, suggesting a potential upside of 4.08%. Given Tech Data Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Tech Data Corporation is more favorable than Best Buy Co..

Dividends

Best Buy Co. pays an annual dividend of $1.36 per share and has a dividend yield of 2.4%. Tech Data Corporation does not pay a dividend. Best Buy Co. pays out 36.5% of its earnings in the form of a dividend. Tech Data Corporation has increased its dividend for 5 consecutive years.

Valuation & Earnings

This table compares Best Buy Co. and Tech Data Corporation’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Best Buy Co.	$39.49 billion	0.45	$2.45 billion	$3.73	15.45
Tech Data Corporation	$27.94 billion	0.14	$441.14 million	$5.38	19.04

Best Buy Co. has higher revenue and earnings than Tech Data Corporation. Best Buy Co. is trading at a lower price-to-earnings ratio than Tech Data Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

94.2% of Best Buy Co. shares are owned by institutional investors. Comparatively, 93.2% of Tech Data Corporation shares are owned by institutional investors. 1.2% of Best Buy Co. shares are owned by company insiders. Comparatively, 1.6% of Tech Data Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Best Buy Co. has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Tech Data Corporation has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Summary

Best Buy Co. beats Tech Data Corporation on 11 of the 17 factors compared between the two stocks.

Best Buy Co. Company Profile

Best Buy Co., Inc. is a provider of technology products, services and solutions. The Company offers products and services to the customers visiting its stores, engaging with Geek Squad agents, or using its Websites or mobile applications. It has operations in the United States, Canada and Mexico. The Company operates through two segments: Domestic and International. The Domestic segment consists of the operations in all states, districts and territories of the United States, under various brand names, including Best Buy, bestbuy.com, Best Buy Mobile, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theater, and Pacific Kitchen and Home. The International segment consists of all operations in Canada and Mexico under the brand names, Best Buy, bestbuy.com.ca, bestbuy.com.mx, Best Buy Express, Best Buy Mobile and Geek Squad. As of December 31, 2016, the Company operated 1,200 large-format and 400 small-format stores throughout its Domestic and International segments.

Tech Data Corporation Company Profile

Tech Data Corporation is a wholesale distributor of technology products. The Company serves as a link in the technology supply chain by bringing products from the technology vendors to market, as well as providing its customers with logistics capabilities and services. It operates through the segment of distributing technology products, logistics management and other value-added services. It operates in two geographic segments: the Americas and Europe. It provides resellers training and technical support suite of electronic commerce tools customized shipping documents product configuration or integration services and access to financing programs. Its customers include value-added resellers, direct marketers, retailers and corporate resellers who support the diverse technology needs of end users. It sells its products to customers in approximately 100 countries throughout North America, South America, Europe, the Middle East and Africa.