ARM vs. CDW: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at ARM and CDW, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
ARM’s market capitalization of 163.93 billion USD is substantially larger than CDW’s 23.98 billion USD, indicating a significant difference in their market valuations.
ARM’s beta of 4.10 points to significantly higher volatility compared to CDW (beta: 0.94), suggesting ARM has greater potential for both gains and losses relative to market movements.
ARM trades as an American Depositary Receipt (ADR), offering U.S. investors a convenient way to access its foreign-listed shares. In contrast, CDW is a standard domestic listing.
| Symbol | ARM | CDW |
|---|---|---|
| Company Name | Arm Holdings plc American Depositary Shares | CDW Corporation |
| Country | GB | US |
| Sector | Technology | Technology |
| Industry | Semiconductors | Information Technology Services |
| CEO | Rene Anthony Andrada Haas | Christine A. Leahy |
| Price | 155.09 USD | 182.13 USD |
| Market Cap | 163.93 billion USD | 23.98 billion USD |
| Beta | 4.10 | 0.94 |
| Exchange | NASDAQ | NASDAQ |
| IPO Date | September 14, 2023 | June 27, 2013 |
| ADR | Yes | No |
Historical Performance
This chart compares the performance of ARM and CDW by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
ARM
12.71%
Semiconductors Industry
- Max
- 41.84%
- Q3
- 15.81%
- Median
- 6.31%
- Q1
- -5.54%
- Min
- -30.12%
ARM’s Return on Equity of 12.71% is on par with the norm for the Semiconductors industry, indicating its profitability relative to shareholder equity is typical for the sector.
CDW
47.24%
Information Technology Services Industry
- Max
- 47.24%
- Q3
- 23.27%
- Median
- 12.85%
- Q1
- 2.22%
- Min
- -26.63%
In the upper quartile for the Information Technology Services industry, CDW’s Return on Equity of 47.24% signals a highly effective use of shareholder capital to drive profitability compared to most of its peers.
Return on Invested Capital
ARM
11.37%
Semiconductors Industry
- Max
- 30.91%
- Q3
- 11.34%
- Median
- 4.08%
- Q1
- -2.17%
- Min
- -19.59%
In the upper quartile for the Semiconductors industry, ARM’s Return on Invested Capital of 11.37% signifies a highly effective use of its capital to generate profits when compared to its peers.
CDW
13.23%
Information Technology Services Industry
- Max
- 28.29%
- Q3
- 13.19%
- Median
- 7.24%
- Q1
- 0.23%
- Min
- -18.82%
In the upper quartile for the Information Technology Services industry, CDW’s Return on Invested Capital of 13.23% signifies a highly effective use of its capital to generate profits when compared to its peers.
Net Profit Margin
ARM
19.77%
Semiconductors Industry
- Max
- 51.69%
- Q3
- 19.67%
- Median
- 8.56%
- Q1
- -5.44%
- Min
- -38.60%
A Net Profit Margin of 19.77% places ARM in the upper quartile for the Semiconductors industry, signifying strong profitability and more effective cost management than most of its peers.
CDW
5.10%
Information Technology Services Industry
- Max
- 20.47%
- Q3
- 11.62%
- Median
- 5.97%
- Q1
- 1.89%
- Min
- -4.62%
CDW’s Net Profit Margin of 5.10% is aligned with the median group of its peers in the Information Technology Services industry. This indicates its ability to convert revenue into profit is typical for the sector.
Operating Profit Margin
ARM
20.74%
Semiconductors Industry
- Max
- 58.03%
- Q3
- 22.12%
- Median
- 8.40%
- Q1
- -3.73%
- Min
- -36.14%
ARM’s Operating Profit Margin of 20.74% is around the midpoint for the Semiconductors industry, indicating that its efficiency in managing core business operations is typical for the sector.
CDW
7.90%
Information Technology Services Industry
- Max
- 29.42%
- Q3
- 14.75%
- Median
- 8.92%
- Q1
- 2.62%
- Min
- -11.92%
CDW’s Operating Profit Margin of 7.90% is around the midpoint for the Information Technology Services industry, indicating that its efficiency in managing core business operations is typical for the sector.
Profitability at a Glance
| Symbol | ARM | CDW |
|---|---|---|
| Return on Equity (TTM) | 12.71% | 47.24% |
| Return on Assets (TTM) | 8.87% | 7.24% |
| Return on Invested Capital (TTM) | 11.37% | 13.23% |
| Net Profit Margin (TTM) | 19.77% | 5.10% |
| Operating Profit Margin (TTM) | 20.74% | 7.90% |
| Gross Profit Margin (TTM) | 95.83% | 21.86% |
Financial Strength
Current Ratio
ARM
5.20
Semiconductors Industry
- Max
- 9.10
- Q3
- 5.23
- Median
- 3.09
- Q1
- 2.49
- Min
- 1.02
ARM’s Current Ratio of 5.20 aligns with the median group of the Semiconductors industry, indicating that its short-term liquidity is in line with its sector peers.
CDW
1.32
Information Technology Services Industry
- Max
- 3.41
- Q3
- 2.37
- Median
- 1.58
- Q1
- 1.20
- Min
- 0.00
CDW’s Current Ratio of 1.32 aligns with the median group of the Information Technology Services industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio
ARM
0.05
Semiconductors Industry
- Max
- 0.97
- Q3
- 0.46
- Median
- 0.21
- Q1
- 0.05
- Min
- 0.00
ARM’s Debt-to-Equity Ratio of 0.05 is typical for the Semiconductors industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
CDW
2.58
Information Technology Services Industry
- Max
- 2.63
- Q3
- 1.16
- Median
- 0.48
- Q1
- 0.09
- Min
- 0.01
CDW’s leverage is in the upper quartile of the Information Technology Services industry, with a Debt-to-Equity Ratio of 2.58. While this approach can boost equity growth, it also exposes the company to greater financial vulnerability.
Interest Coverage Ratio
ARM
--
Semiconductors Industry
- Max
- 36.25
- Q3
- 29.12
- Median
- 7.01
- Q1
- -1.22
- Min
- -18.18
Interest Coverage Ratio data for ARM is currently unavailable.
CDW
7.65
Information Technology Services Industry
- Max
- 17.52
- Q3
- 10.04
- Median
- 4.66
- Q1
- 0.80
- Min
- -10.50
CDW’s Interest Coverage Ratio of 7.65 is positioned comfortably within the norm for the Information Technology Services industry, indicating a standard and healthy capacity to cover its interest payments.
Financial Strength at a Glance
| Symbol | ARM | CDW |
|---|---|---|
| Current Ratio (TTM) | 5.20 | 1.32 |
| Quick Ratio (TTM) | 5.20 | 1.20 |
| Debt-to-Equity Ratio (TTM) | 0.05 | 2.58 |
| Debt-to-Asset Ratio (TTM) | 0.04 | 0.40 |
| Net Debt-to-EBITDA Ratio (TTM) | -2.31 | 2.91 |
| Interest Coverage Ratio (TTM) | -- | 7.65 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for ARM and CDW. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
ARM
0.00%
Semiconductors Industry
- Max
- 6.48%
- Q3
- 0.93%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ARM currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
CDW
1.37%
Information Technology Services Industry
- Max
- 16.57%
- Q3
- 1.39%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
CDW’s Dividend Yield of 1.37% is consistent with its peers in the Information Technology Services industry, providing a dividend return that is standard for its sector.
Dividend Payout Ratio
ARM
0.00%
Semiconductors Industry
- Max
- 204.29%
- Q3
- 31.85%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ARM has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
CDW
30.52%
Information Technology Services Industry
- Max
- 112.81%
- Q3
- 20.98%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
CDW’s Dividend Payout Ratio of 30.52% is in the upper quartile for the Information Technology Services industry. This indicates a strong commitment to shareholder returns but also suggests that a smaller portion of earnings is retained for reinvestment compared to many peers.
Dividend at a Glance
| Symbol | ARM | CDW |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 1.37% |
| Dividend Payout Ratio (TTM) | 0.00% | 30.52% |
Valuation
Price-to-Earnings Ratio
ARM
206.59
Semiconductors Industry
- Max
- 86.15
- Q3
- 47.38
- Median
- 27.87
- Q1
- 18.89
- Min
- 4.73
At 206.59, ARM’s P/E Ratio is exceptionally high, exceeding the typical maximum for the Semiconductors industry. This suggests the stock may be significantly overvalued compared to its peers and implies high market expectations that could be difficult to meet.
CDW
22.21
Information Technology Services Industry
- Max
- 49.12
- Q3
- 36.91
- Median
- 24.84
- Q1
- 15.88
- Min
- 1.55
CDW’s P/E Ratio of 22.21 is within the middle range for the Information Technology Services industry. This suggests its valuation is in line with the sector average, representing neither a significant premium nor a discount compared to its peers.
Forward P/E to Growth Ratio
ARM
7.75
Semiconductors Industry
- Max
- 4.73
- Q3
- 2.80
- Median
- 1.11
- Q1
- 0.68
- Min
- 0.01
The Forward PEG Ratio is often not a primary valuation metric in the Semiconductors industry.
CDW
3.95
Information Technology Services Industry
- Max
- 5.35
- Q3
- 3.79
- Median
- 2.23
- Q1
- 1.19
- Min
- 0.03
A Forward PEG Ratio of 3.95 places CDW in the upper quartile for the Information Technology Services industry. This suggests the stock is potentially expensive compared to its peers relative to its growth forecast, which may warrant caution.
Price-to-Sales Ratio
ARM
40.91
Semiconductors Industry
- Max
- 21.96
- Q3
- 10.21
- Median
- 4.45
- Q1
- 2.32
- Min
- 0.48
With a P/S Ratio of 40.91, ARM trades at a valuation that eclipses even the highest in the Semiconductors industry. This implies the market has priced in exceptionally optimistic scenarios for future revenue growth, posing considerable valuation risk.
CDW
1.12
Information Technology Services Industry
- Max
- 8.15
- Q3
- 4.17
- Median
- 2.14
- Q1
- 1.00
- Min
- 0.10
CDW’s P/S Ratio of 1.12 aligns with the market consensus for the Information Technology Services industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
Price-to-Book Ratio
ARM
23.92
Semiconductors Industry
- Max
- 13.12
- Q3
- 6.49
- Median
- 3.31
- Q1
- 1.74
- Min
- 0.23
At 23.92, ARM’s P/B Ratio is at an extreme premium to the Semiconductors industry. This signifies that the market’s valuation is heavily reliant on future potential rather than its current net asset value, which can be a high-risk proposition.
CDW
10.39
Information Technology Services Industry
- Max
- 11.78
- Q3
- 6.14
- Median
- 3.23
- Q1
- 1.97
- Min
- 0.42
The P/B Ratio is often not a primary valuation metric for the Information Technology Services industry.
Valuation at a Glance
| Symbol | ARM | CDW |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 206.59 | 22.21 |
| Forward PEG Ratio (TTM) | 7.75 | 3.95 |
| Price-to-Sales Ratio (P/S, TTM) | 40.91 | 1.12 |
| Price-to-Book Ratio (P/B, TTM) | 23.92 | 10.39 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 1011.91 | 23.88 |
| EV-to-EBITDA (TTM) | 216.85 | 15.54 |
| EV-to-Sales (TTM) | 40.48 | 1.38 |