Critical Review: ScanSource (NASDAQ:SCSC) and Siemens (OTCMKTS:SIEGY)

Siemens (OTCMKTS:SIEGY) and ScanSource (NASDAQ:SCSC) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Risk and Volatility

Siemens has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, ScanSource has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Siemens and ScanSource, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Siemens	1	3	0	1	2.20
ScanSource	0	1	1	0	2.50

ScanSource has a consensus price target of $42.00, suggesting a potential upside of 3.52%. Given ScanSource’s stronger consensus rating and higher probable upside, analysts plainly believe ScanSource is more favorable than Siemens.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Siemens	$82.35 billion	2.46	$9.00 billion	$6.62	19.13
ScanSource	$3.26 billion	0.28	$77.06 million	$2.77	14.65

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

Insider and Institutional Ownership

0.8% of Siemens shares are held by institutional investors. Comparatively, 97.9% of ScanSource shares are held by institutional investors. 4.2% of ScanSource shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Siemens	12.61%	13.19%	5.11%
ScanSource	2.27%	8.96%	4.68%

Summary

Siemens beats ScanSource on 9 of the 15 factors compared between the two stocks.

About Siemens

Siemens Aktiengesellschaft, a technology company, focuses in the areas of automation and digitalization in Europe, Commonwealth of Independent States, Africa, the Middle East, the Americas, Asia, and Australia. It operates through Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services (SFS) segments. The Digital Industries segment provides automation systems and software for factories, numerical control systems, servo motors, drives and inverters, and integrated automation systems for machine tools and production machines; process control systems, machine-to-machine communication products, sensors and radio frequency identification systems; software for production and product lifecycle management, and simulation and testing of mechatronic systems; and the Mendix cloud-native low-code application development platform. The Smart Infrastructure segment offers products, systems, solutions, services, and software to support sustainable transition in energy generation from fossil and renewable sources; sustainable buildings and communities; and buildings, electrification, and electrical products. The Mobility segment provides rail passenger and freight transportation, such as vehicles, trams and light rail, and commuter trains, as well as trains and passenger coaches; locomotives and solutions for automated transportation; products and solutions for rail automation; electrification products; maintenance and digital services; and digital and cloud-based solutions, and related services. The Siemens Healthineers segment develops, manufactures, and sells various diagnostic and therapeutic products and services; and provides clinical consulting and training services. The SFS segment offers debt and equity investments; leasing, lending, and working capital, structured, equipment, and project financing; and financial advisory services. Siemens Aktiengesellschaft was founded in 1847 and is headquartered in Munich, Germany.

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.