TAL Education Group (NYSE:TAL) & Frontdoor (NASDAQ:FTDR) Financial Analysis

Frontdoor (NASDAQ:FTDR) and TAL Education Group (NYSE:TAL) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Frontdoor and TAL Education Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontdoor	12.96%	124.74%	15.33%
TAL Education Group	22.13%	18.96%	11.64%

Risk and Volatility

Frontdoor has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500. Comparatively, TAL Education Group has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500.

Insider and Institutional Ownership

37.8% of TAL Education Group shares are held by institutional investors. 1.6% of Frontdoor shares are held by insiders. Comparatively, 1.8% of TAL Education Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Frontdoor and TAL Education Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontdoor	$2.09 billion	3.12	$255.00 million	$4.00	24.16
TAL Education Group	$3.01 billion	1.89	$530.75 million	$1.31	7.84

TAL Education Group has higher revenue and earnings than Frontdoor. TAL Education Group is trading at a lower price-to-earnings ratio than Frontdoor, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Frontdoor and TAL Education Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontdoor	0	2	5	0	2.71
TAL Education Group	0	2	1	1	2.75

Frontdoor presently has a consensus target price of $99.80, indicating a potential upside of 3.27%. TAL Education Group has a consensus target price of $15.05, indicating a potential upside of 46.47%. Given TAL Education Group’s stronger consensus rating and higher possible upside, analysts clearly believe TAL Education Group is more favorable than Frontdoor.

Summary

TAL Education Group beats Frontdoor on 8 of the 15 factors compared between the two stocks.

About Frontdoor

Frontdoor, Inc. provides home service plans and repair solutions in the United States. Its plans help homeowners manage the cost of repairing or replacing covered home systems and appliances, such as heating and cooling equipment, plumbing, and kitchen appliances. The company serves customers through brands including American Home Shield, HSA Home Warranty, and OneGuard Home Warranties. It also connects customers with a network of independent service contractors and offers digital tools and support to help arrange home repairs.

About TAL Education Group

TAL Education Group is a China-based education and technology company that provides learning services, educational content and related technology products. Its offerings include learning programs and digital resources for students, as well as smart learning devices and solutions for families and schools. Founded in 2003 as Xueersi, the company later adopted the name TAL Education Group. Following changes to China’s regulation of compulsory-education tutoring, TAL shifted its business toward services and products such as non-academic learning programs, educational technology and learning materials.