Stock of the Day

November 30, 2020

CDW (CDW)

$151.90
+$1.60 (+1.1%)
Market Cap: $19.03B

About CDW

CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products and services, as well as integrated IT solutions, including on-premise and cloud capabilities across hybrid infrastructure, digital experience, and security. It also provides hardware products comprising notebooks/mobile devices, tablets, network communications, desktop computers, collaboration, data storage and servers, and others; and software products, such as cloud solutions, software assurance, application suites, security, virtualization, operating systems, and network management. In addition, the company offers advisory and design, software development, implementation, managed, professional, configuration, partner, and telecom services, as well as warranties; delivers and manages mission critical software, systems, and network solutions; and implementation and installation, and repair services to its customers through various third-party service providers. It serves government, education, and healthcare customers; and small, medium, and large business customers. CDW Corporation was founded in 1984 and is headquartered in Vernon Hills, Illinois.

CDW Bull Case

Here are some ways that investors could benefit from investing in CDW Co.:

  • CDW Co. reported strong quarterly earnings, with earnings per share significantly exceeding analyst expectations, indicating robust financial performance.
  • The company has demonstrated a solid revenue growth of around 10% compared to the same quarter last year, showcasing its ability to expand in a competitive market.
  • With a return on equity of over 50%, CDW Co. is effectively utilizing its equity to generate profits, which is a positive indicator for potential investors.
  • The current stock price is approximately $137, reflecting a stable valuation in the market, which may attract investors looking for growth opportunities.
  • CDW Co. has a consistent dividend payout, with a yield of about 1.9%, providing a steady income stream for investors while they hold the stock.

CDW Bear Case

Investors should be bearish about investing in CDW Co. for these reasons:

  • The company has a relatively high debt-to-equity ratio of 1.97, which may indicate increased financial risk and reliance on borrowed funds.
  • Despite recent growth, the net margin of 4.60% suggests that profitability could be under pressure, which may concern investors about long-term sustainability.
  • CDW Co. operates in a highly competitive technology sector, which could impact its market share and pricing power in the future.
  • The stock has shown volatility, with a beta of 0.96, indicating that it may be subject to market fluctuations, which could deter risk-averse investors.
  • Insider selling activity, such as the recent sale of shares by a company insider, may raise concerns about the company's future prospects and management confidence.
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