Best Buy vs CDW Which Is Superior?

Best Buy and CDW Corporation are two leading companies in the technology industry, both offering a wide range of products and services to consumers and businesses alike. While Best Buy is known for its retail stores and online platform, CDW focuses on providing IT solutions and services to businesses. Investors may compare the stocks of these two companies to determine which one offers the best potential for growth and profitability in the ever-evolving tech market.

Best Buy or CDW?

When comparing Best Buy and CDW, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Best Buy and CDW.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Best Buy has a dividend yield of 5.16%, while CDW has a dividend yield of 1.33%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Best Buy reports a 5-year dividend growth of 15.38% year and a payout ratio of 63.81%. On the other hand, CDW reports a 5-year dividend growth of 20.91% year and a payout ratio of 29.93%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Best Buy P/E ratio at 15.55 and CDW's P/E ratio at 22.38. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Best Buy P/B ratio is 6.31 while CDW's P/B ratio is 10.57.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Best Buy has seen a 5-year revenue growth of 0.47%, while CDW's is 0.48%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Best Buy's ROE at 41.81% and CDW's ROE at 50.99%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $90.23 for Best Buy and $185.70 for CDW. Over the past year, Best Buy's prices ranged from $62.92 to $103.71, with a yearly change of 64.83%. CDW's prices fluctuated between $185.70 and $263.37, with a yearly change of 41.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.