Stock of the Day

November 30, 2020

CDW (CDW)

$186.50
-$6.30 (-3.3%)
Market Cap: $25.69B

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. recently reported earnings per share of $2.40, exceeding the consensus estimate of $2.33, indicating strong financial performance and effective management.
  • The company has declared a quarterly dividend of $0.625 per share, translating to an annualized dividend of $2.50, which offers a dividend yield of 1.32%. This can provide a steady income stream for investors.
  • CDW Co. has a market capitalization of $25.24 billion, reflecting its significant size and stability in the information technology sector, which can be appealing to investors seeking less volatile investments.
  • Recent analyst ratings show a consensus of "Moderate Buy" with an average price target of $242.67, suggesting potential for price appreciation based on analyst confidence.
  • The stock is currently trading at $192.80, which is below its one-year high of $263.37, indicating a possible buying opportunity for investors looking for value.

CDW Bear Case

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

  • CDW Co. has a relatively high debt-to-equity ratio of 2.38, which may indicate higher financial risk and could affect the company's ability to manage its debt obligations effectively.
  • The stock has experienced a decline of 0.9% recently, which may signal potential volatility and uncertainty in the market, making it a riskier investment at this time.
  • Analysts have issued mixed ratings, with some downgrading their outlook, which could reflect concerns about future performance and market conditions.
  • The company's PEG ratio of 5.40 suggests that the stock may be overvalued relative to its earnings growth, which could deter value-focused investors.
  • With institutional investors holding 93.15% of the stock, retail investors may have less influence on stock price movements, potentially leading to less favorable conditions for individual investors.

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