Head-To-Head Comparison: Bel Fuse (NASDAQ:BELFB) versus PC Connection (NASDAQ:CNXN)

PC Connection (NASDAQ:CNXN) and Bel Fuse (NASDAQ:BELFB) are both mid-cap technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for PC Connection and Bel Fuse, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PC Connection	0	1	1	0	2.50
Bel Fuse	1	1	6	0	2.62

Bel Fuse has a consensus price target of $315.67, suggesting a potential upside of 44.09%. Given Bel Fuse’s stronger consensus rating and higher probable upside, analysts clearly believe Bel Fuse is more favorable than PC Connection.

Profitability

This table compares PC Connection and Bel Fuse’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PC Connection	3.21%	10.90%	7.29%
Bel Fuse	7.21%	9.75%	5.23%

Dividends

PC Connection pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. Bel Fuse pays an annual dividend of $0.28 per share and has a dividend yield of 0.1%. PC Connection pays out 21.2% of its earnings in the form of a dividend. Bel Fuse pays out 6.8% 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. PC Connection has increased its dividend for 2 consecutive years. PC Connection is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

PC Connection has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Bel Fuse has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Earnings and Valuation

This table compares PC Connection and Bel Fuse”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PC Connection	$2.87 billion	0.80	$83.72 million	$3.78	24.03
Bel Fuse	$675.46 million	4.68	$61.54 million	$4.14	52.92

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

Insider & Institutional Ownership

42.8% of PC Connection shares are owned by institutional investors. Comparatively, 58.4% of Bel Fuse shares are owned by institutional investors. 56.6% of PC Connection shares are owned by insiders. Comparatively, 5.4% of Bel Fuse shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Bel Fuse beats PC Connection on 10 of the 17 factors compared between the two stocks.

About PC Connection

PC Connection, Inc., together with its subsidiaries, provides a range of information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions. It offers IT products, such as computer systems, software and peripheral equipment, networking communications, and other products and accessories. The company also provides services comprising design, configuration, and implementation of IT solutions. In addition, publishes Connected, a quarterly publication that provides informative articles on the latest technologies and industry trends; distributes specialty catalogs to education, healthcare, and government customers; and MacConnection that publishes a catalog for the Apple market. The company markets its products and services through its Websites, such as connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses (SMBs) comprising small office/home offices customers; government and educational institutions; and medium-to-large corporate accounts through outbound telemarketing and field sales and marketing programs targeted to specific customer populations, as well as through digital, Web, and print media advertising. PC Connection, Inc. was founded in 1982 and is headquartered in Merrimack, New Hampshire.

About Bel Fuse

Bel Fuse Inc. designs, manufactures, markets, and sells products that power, protect, and connect electronic circuits. The company’s products are used in the networking, telecommunications, computing, general industrial, high-speed data transmission, military, commercial aerospace, transportation, and e-Mobility industries. It provides power solutions and protection products, including front-end power supplies, board-mount power products, industrial and transportation power products, external power products, and circuit protection products. The company also offers connectivity solutions, such as expanded beam fiber optic connectors, cable assemblies, and active optical devices; copper-based connectors/cable assemblies; radio frequency connectors, cable assemblies, microwave devices, and low loss cables; and ethernet, I/O, and industrial and power connectivity products. In addition, it provides magnetic solutions comprising integrated connector modules, power transformers, SMD power inductors and SMPS transformers, and ethernet discrete components. The company sells its products through direct strategic account managers, regional sales managers working with independent sales representative organizations, and authorized distributors in the United States, the People’s Republic of China, Macao, the United Kingdom, Slovakia, Germany, India, Switzerland, and internationally. Bel Fuse Inc. was incorporated in 1949 and is headquartered in West Orange, New Jersey.