CDW vs Chegg Which Is a Smarter Choice?

CDW Corporation and Chegg Inc. are two technology companies with contrasting business models. CDW is a leading provider of technology solutions for businesses, government agencies, and educational institutions, while Chegg is known for its online learning platform and textbook rental services. Both companies have seen growth in recent years, but CDW's stock has been more stable and consistent, while Chegg's stock has experienced more volatility. Investors should consider the differences in business strategies and market conditions when evaluating these two stocks for investment opportunities.

CDW or Chegg?

When comparing CDW and Chegg, 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 CDW and Chegg.

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. CDW has a dividend yield of 1.4%, while Chegg has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CDW reports a 5-year dividend growth of 20.91% year and a payout ratio of 29.93%. On the other hand, Chegg reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 CDW P/E ratio at 21.37 and Chegg's P/E ratio at -0.22. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CDW P/B ratio is 10.09 while Chegg's P/B ratio is 0.96.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CDW has seen a 5-year revenue growth of 0.48%, while Chegg's is 1.17%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CDW's ROE at 50.99% and Chegg's ROE at -133.62%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $175.94 for CDW and $1.66 for Chegg. Over the past year, CDW's prices ranged from $175.94 to $263.37, with a yearly change of 49.69%. Chegg's prices fluctuated between $1.34 and $11.48, with a yearly change of 756.72%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.