Contrasting TPI Composites (NASDAQ:TPIC) and ScanSource (NASDAQ:SCSC)

TPI Composites (NASDAQ:TPIC) and ScanSource (NASDAQ:SCSC) are both small-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, profitability, valuation, earnings and risk.

Analyst Ratings

This is a breakdown of current ratings for TPI Composites and ScanSource, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TPI Composites	2	5	1	1	2.11
ScanSource	0	1	1	0	2.50

TPI Composites currently has a consensus price target of $2.01, suggesting a potential upside of 168.00%. ScanSource has a consensus price target of $42.00, suggesting a potential upside of 11.17%. Given TPI Composites’ higher probable upside, equities research analysts clearly believe TPI Composites is more favorable than ScanSource.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TPI Composites	-16.57%	N/A	-24.92%
ScanSource	2.27%	8.96%	4.68%

Volatility and Risk

TPI Composites has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500. Comparatively, ScanSource has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Insider & Institutional Ownership

75.2% of TPI Composites shares are held by institutional investors. Comparatively, 97.9% of ScanSource shares are held by institutional investors. 3.7% of TPI Composites shares are held by insiders. Comparatively, 4.2% of ScanSource shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares TPI Composites and ScanSource”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TPI Composites	$1.37 billion	0.03	-$240.71 million	($4.78)	-0.16
ScanSource	$3.26 billion	0.26	$77.06 million	$2.77	13.64

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

Summary

ScanSource beats TPI Composites on 11 of the 14 factors compared between the two stocks.

About TPI Composites

TPI Composites, Inc. manufactures and sells composite wind blades, and related precision molding and assembly systems to original equipment manufacturers (OEMs) in the United States, Mexico, Europe, the Middle East, Africa, and India. It also provides composite solutions for the automotive industry; and field service inspection and repair services comprising diagnostic, repair, and maintenance services for wind blades to OEM customers, and wind farm owners and operators. The company was formerly known as LCSI Holding, Inc. and changed its name to TPI Composites, Inc. in 2008. TPI Composites, Inc. was founded in 1968 and is headquartered in Scottsdale, Arizona.

About ScanSource

ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. 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.