Reviewing Vertiv (NYSE:VRT) and CDW (NASDAQ:CDW)

CDW (NASDAQ:CDW) and Vertiv (NYSE:VRT) are both large-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Volatility and Risk

CDW has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Vertiv has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CDW	$21.00 billion	0.87	$1.08 billion	$7.92	17.67
Vertiv	$8.01 billion	7.92	$495.80 million	$2.65	62.62

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for CDW and Vertiv, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CDW	0	5	2	0	2.29
Vertiv	1	6	20	2	2.79

CDW currently has a consensus price target of $190.67, suggesting a potential upside of 36.27%. Vertiv has a consensus price target of $177.81, suggesting a potential upside of 7.15%. Given CDW’s higher probable upside, analysts clearly believe CDW is more favorable than Vertiv.

Profitability

This table compares CDW and Vertiv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CDW	4.76%	51.89%	8.35%
Vertiv	10.67%	50.82%	14.98%

Dividends

CDW pays an annual dividend of $2.50 per share and has a dividend yield of 1.8%. Vertiv pays an annual dividend of $0.15 per share and has a dividend yield of 0.1%. CDW pays out 31.6% of its earnings in the form of a dividend. Vertiv pays out 5.7% 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. CDW has raised its dividend for 10 consecutive years and Vertiv has raised its dividend for 2 consecutive years. CDW is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

93.2% of CDW shares are owned by institutional investors. Comparatively, 89.9% of Vertiv shares are owned by institutional investors. 0.9% of CDW shares are owned by company insiders. Comparatively, 5.0% of Vertiv shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Vertiv beats CDW on 10 of the 18 factors compared between the two stocks.

About CDW

CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products and services, as well as integrated IT solutions, including on-premise and cloud capabilities across hybrid infrastructure, digital experience, and security. It also provides hardware products comprising notebooks/mobile devices, tablets, network communications, desktop computers, collaboration, data storage and servers, and others; and software products, such as cloud solutions, software assurance, application suites, security, virtualization, operating systems, and network management. In addition, the company offers advisory and design, software development, implementation, managed, professional, configuration, partner, and telecom services, as well as warranties; delivers and manages mission critical software, systems, and network solutions; and implementation and installation, and repair services to its customers through various third-party service providers. It serves government, education, and healthcare customers; and small, medium, and large business customers. CDW Corporation was founded in 1984 and is headquartered in Vernon Hills, Illinois.

About Vertiv

Vertiv Holdings Co, together with its subsidiaries, designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It offers AC and DC power management products, switchgear and busbar products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure that are integral to the technologies used for various services, including e-commerce, online banking, file sharing, video on-demand, energy storage, wireless communications, Internet of Things, and online gaming. The company also provides lifecycle management services, predictive analytics, and professional services for deploying, maintaining, and optimizing its products and their related systems; and preventative maintenance, acceptance testing, engineering and consulting, performance assessments, remote monitoring, training, spare parts, and digital critical infrastructure software services. It offers its products primarily under the Vertiv, Liebert, NetSure, Geist, E&I, Powerbar, and Avocent brands. The company serves cloud services, financial services, healthcare, transportation, manufacturing, energy, education, government, social media, and retail industries through a network of direct sales professionals, independent sales representatives, channel partners, and original equipment manufacturers. Vertiv Holdings Co is headquartered in Westerville, Ohio.