Critical Survey: Scholastic (SCHL) versus Its Peers

Scholastic (NASDAQ:SCHL) is one of 257 publicly-traded companies in the “Media” industry, but how does it contrast to its competitors? We will compare Scholastic to related businesses based on the strength of its profitability, risk, valuation, analyst recommendations, earnings, dividends and institutional ownership.

Dividends

Scholastic pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Scholastic pays out 71.4% of its earnings in the form of a dividend. As a group, “Media” companies pay a dividend yield of 5.5% and pay out 285.7% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Scholastic and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scholastic	0	3	0	0	2.00
Scholastic Competitors	2336	6933	10777	490	2.46

Scholastic currently has a consensus target price of $35.00, indicating a potential downside of 8.01%. As a group, “Media” companies have a potential upside of 29.24%. Given Scholastic’s competitors stronger consensus rating and higher probable upside, analysts plainly believe Scholastic has less favorable growth aspects than its competitors.

Profitability

This table compares Scholastic and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scholastic	3.60%	5.00%	2.22%
Scholastic Competitors	-18.60%	-48.00%	-4.99%

Earnings & Valuation

This table compares Scholastic and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Scholastic	$1.57 billion	$56.70 million	27.18
Scholastic Competitors	$3.00 billion	$35.12 million	-0.08

Scholastic’s competitors have higher revenue, but lower earnings than Scholastic. Scholastic is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

82.6% of Scholastic shares are held by institutional investors. Comparatively, 37.7% of shares of all “Media” companies are held by institutional investors. 12.8% of Scholastic shares are held by company insiders. Comparatively, 17.6% of shares of all “Media” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Scholastic has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Scholastic’s competitors have a beta of 0.96, meaning that their average share price is 4% less volatile than the S&P 500.

Summary

Scholastic beats its competitors on 8 of the 15 factors compared.

Scholastic Company Profile

Scholastic is a global children’s publishing, education and media company. Its businesses include publishing and distributing children’s books, providing educational materials and classroom resources, and operating book clubs and book fairs that connect students with books. The company’s products and services include fiction and nonfiction books, classroom magazines, curriculum materials and digital learning resources. Scholastic serves schools, educators, families and young readers in the United States and international markets.