ARW - Arrow And Avnet: 2 Key Players In The Components Supply Chain

• Both Arrow Electronics and Avnet play key roles in the supply chain for electronics components and their stocks have outperformed the wider semiconductor sector since the beginning of this year.
• As value-added distributors, they have been faring well in a supply-constrained environment, even managing to grow gross margins.
• However, with the current macroeconomic uncertainty, there could be a slowdown in demand itself in addition to supply pressures.
• In this case, Arrow has better profitability metrics, but revenue growth during the last reported quarter is down due to an unfavorable product mix and this could persist throughout 2022.
• As for Avnet, it has delivered better revenue and earnings growth and is a buy also due to its ability to pay dividends.

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