ScanSource (NASDAQ:SCSC) vs. Otsuka (OTCMKTS:OSUKF) Critical Analysis

ScanSource (NASDAQ:SCSC) and Otsuka (OTCMKTS:OSUKF) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ScanSource	2.37%	11.25%	4.78%
Otsuka	N/A	N/A	N/A

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ScanSource	$3.79 billion	0.22	$89.81 million	$3.53	9.41
Otsuka	N/A	N/A	N/A	N/A	N/A

ScanSource has higher revenue and earnings than Otsuka.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for ScanSource and Otsuka, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ScanSource	0	0	2	0	3.00
Otsuka	1	0	0	0	1.00

ScanSource currently has a consensus target price of $40.00, indicating a potential upside of 20.48%. Given ScanSource’s stronger consensus rating and higher probable upside, analysts clearly believe ScanSource is more favorable than Otsuka.

Institutional & Insider Ownership

94.6% of ScanSource shares are owned by institutional investors. 4.6% of ScanSource shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

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

About ScanSource

ScanSource, Inc. distributes technology products and solutions in the United States, Canada, and internationally. 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.

About Otsuka

Otsuka Corporation, together with its subsidiaries, engages in the provision of system integration, support, and other services in Japan. The System Integration Business segment offers management systems and collaborative software, such as ERP packages and groupware to cover a range of specialized fields, including CAD and web technologies; and provides software, hardware, intranet, and security products for the construction and expansion of computer networks, as well as intermediary services between manufacturers and system integrators. The segment also sells computers, copiers, and communications equipment and software; and develops consigned software. The Service and Support Business segment involved in the provision of emergency computer rescue services for corporate and individual clients; coordination of multi-vendor efforts consisting of pick-up, repair, and return of computers. The segment also offers 24/7 network support and comprehensive services for planning, design, construction, and operation of corporate information systems, as well as out-sources system engineers. It also provides educational support services. The company was founded in 1961 and is headquartered in Tokyo, Japan.