ARW vs DGII: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of September 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: ARW is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. ARW and DGII share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined ARW and DGII exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Arrow Electronics is one of the world's largest distributors of electronic components and enterprise computing solutions. It operates two segments: Global Components, which sells semiconductors, passives, interconnect, and related parts from manufacturers to hundreds of thousands of original equipment and contract manufacturers, and Global Enterprise Computing Solutions (ECS), which resells servers, storage, software, security, and cloud services through channel partners. The company sits in the middle of the supply chain, adding value through design support, logistics, inventory management, and financing rather than owning its own products.

Full ARW guide

Digi International designs and sells cellular routers, gateways, embedded modules, and connectivity hardware, paired with software and managed services that keep IoT devices online and remotely managed. Its two reporting lines are IoT Products & Services (the embedded modules and networking hardware) and IoT Solutions (subscription offerings like SmartSense environmental monitoring, the Ventus managed network-as-a-service business, and the Jolt operations platform). Customers span industrial, retail, medical, transportation, and enterprise networking, where uptime and remote device management matter more than raw device cost.

Full DGII guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• ARW drivers: Components cycle recovery; Enterprise computing and cloud.
• DGII drivers: Recurring-revenue mix shift; Margin and EBITDA expansion.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: As a thin-margin distributor, Arrow's profitability is highly sensitive to the electronic components inventory cycle, pricing, and demand swings, and a downturn can compress already low operating margins quickly. For DGII, hardware revenue is cyclical and sensitive to channel-partner inventory levels, which can cause quarterly revenue to swing in either direction.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick ARW if you believe its drivers more; DGII if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the ARW and DGII guides.

ARW. Arrow trades at distributor-style multiples, a low P/E near 15x and a very low price-to-sales ratio around 0.34x that reflect its thin operating margins on very large revenue. Q1 2026 results beat expectations with revenue up about 39% year over year and sharply higher EPS as the components cycle recovered. The low sales multiple is normal for a high-volume, low-margin distribution model rather than a sign of distress.

DGII. At roughly ~$2.8B in market cap against ~$475M in trailing revenue, DGII trades near a mid-single-digit price-to-sales multiple, richer than a pure hardware maker but consistent with a business shifting toward recurring revenue. The premium leans heavily on continued ARR growth and margin expansion delivering the guided EBITDA. If subscription momentum stalls, the multiple has room to compress toward its more hardware-like history.

Headline figures (approximate, July 2026): ARW shows revenue (ttm) ~$32B, q1 2026 revenue ~$9.5B (up ~39% YoY), market cap ~$11B, p/e (normalized) ~15x; DGII shows revenue (ttm) ~$475M, revenue (fy2025) ~$431M, annualized recurring revenue ~$184M, adj. ebitda (fy2026 guide) ~$135M.

ARW and DGII are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined ARW and DGII exposure against your real portfolio. It is not an investment adviser.