Perdoceo Education (NASDAQ:PRDO) & Makita (OTCMKTS:MKTAY) Critical Comparison

Makita (OTCMKTS:MKTAY) and Perdoceo Education (NASDAQ:PRDO) are both mid-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Risk and Volatility

Makita has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Perdoceo Education has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Dividends

Makita pays an annual dividend of $1.18 per share and has a dividend yield of 3.5%. Perdoceo Education pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. Makita pays out 57.6% of its earnings in the form of a dividend. Perdoceo Education pays out 24.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Perdoceo Education has raised its dividend for 1 consecutive years.

Earnings and Valuation

This table compares Makita and Perdoceo Education”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Makita	$5.17 billion	1.71	$524.13 million	$2.05	16.28
Perdoceo Education	$858.61 million	2.43	$159.91 million	$2.74	12.19

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

Analyst Recommendations

This is a summary of recent ratings and target prices for Makita and Perdoceo Education, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Makita	1	0	0	0	1.00
Perdoceo Education	0	1	2	0	2.67

Perdoceo Education has a consensus price target of $44.00, indicating a potential upside of 31.78%. Given Perdoceo Education’s stronger consensus rating and higher possible upside, analysts plainly believe Perdoceo Education is more favorable than Makita.

Profitability

This table compares Makita and Perdoceo Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Makita	10.40%	8.23%	6.98%
Perdoceo Education	20.62%	18.93%	14.66%

Insider & Institutional Ownership

93.5% of Perdoceo Education shares are held by institutional investors. 1.0% of Makita shares are held by company insiders. Comparatively, 1.5% of Perdoceo Education shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Perdoceo Education beats Makita on 13 of the 17 factors compared between the two stocks.

About Makita

Makita Corporation engages in the manufacture and sale of electric power tools, pneumatic tools, and gardening and household equipment in Japan, Europe, North America, Asia, Australia, Brazil, and the United Arab Emirates. It offers cordless, drilling/fastening, impact drilling/demolition, grinding/sanding, sawing, planning/routering, pneumatic, outdoor power, and dust extraction/other equipment, as well as accessories; and cutting equipment for new materials, masonry, and metals. The company was formerly known as Makita Electric Works, Ltd. and changed its name to Makita Corporation in April 1991. Makita Corporation was founded in 1915 and is headquartered in Anjo, Japan.

About Perdoceo Education

Perdoceo Education Corporation provides postsecondary education through online, campus-based, and blended learning programs in the United States. It operates in two segments, Colorado Technical University and The American InterContinental University System. The Colorado Technical University segment offers academic programs, such as business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity, and criminal justice. The American InterContinental University System segment provides academic programs, including business studies, information technologies, education, and health sciences. The company also offers non-degree and professional development programs. In addition, it operates intellipath, a learning platform used to educate students; and a mobile application and two-way messaging platform. The company was formerly known as Career Education Corporation and changed its name to Perdoceo Education Corporation in January 2020. Perdoceo Education Corporation was incorporated in 1994 and is headquartered in Schaumburg, Illinois.