Laureate Education (NASDAQ: LAUR) and Strayer Education (NASDAQ:STRA) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Insider and Institutional Ownership

20.8% of Laureate Education shares are held by institutional investors. Comparatively, 97.1% of Strayer Education shares are held by institutional investors. 13.1% of Laureate Education shares are held by insiders. Comparatively, 6.7% of Strayer Education shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Strayer Education pays an annual dividend of $1.00 per share and has a dividend yield of 1.1%. Laureate Education does not pay a dividend. Strayer Education pays out 28.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations for Laureate Education and Strayer Education, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Laureate Education 0 3 10 0 2.77
Strayer Education 0 2 1 0 2.33

Laureate Education presently has a consensus target price of $16.98, indicating a potential upside of 52.59%. Strayer Education has a consensus target price of $101.33, indicating a potential upside of 7.93%. Given Laureate Education’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Laureate Education is more favorable than Strayer Education.

Profitability

This table compares Laureate Education and Strayer Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Laureate Education -1.47% -2.66% -0.45%
Strayer Education 8.52% 17.27% 11.13%

Valuation and Earnings

This table compares Laureate Education and Strayer Education’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Laureate Education $4.24 billion 0.44 $371.84 million ($1.52) -7.32
Strayer Education $441.09 million 2.28 $34.80 million $3.50 26.83

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

Laureate Education Company Profile

Laureate Education, Inc. provides higher education programs and services to students through an international network of licensed universities and higher education institutions (institutions). The Company’s programs are provided through institutions that are campus-based and Internet-based, or through electronically distributed educational programs (online). It offers its educational services through six segments: Brazil; Mexico; Andean and Iberian; Central America and United States (U.S.) Campuses; Online and Partnerships; and Europe, Middle East, Africa and Asia Pacific (EMEAA). Its institutions also offer an education that emphasizes professional-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines. As of June 30, 2017, the Company’s global network of 69 institutions comprised 57 institutions it owned or controlled, and an additional 12 institutions that it managed or with which it had other relationships.

Strayer Education Company Profile

Strayer Education, Inc. is an education services holding company. The Company provides post-secondary education and other academic programs, through its subsidiaries, Strayer University (the University) and New York Code and Design Academy (NYCDA). As of December 31, 2016, the University offered undergraduate and graduate degree programs in business administration, accounting, information technology, education, health services administration, nursing, public administration and criminal justice at 74 physical campuses located in the Mid-Atlantic and Southern regions of the United States, and online. The University also offers an executive Master of Business Administration (MBA) online through its Jack Welch Management Institute. Its subsidiary, NYCDA, provides non-degree courses in Web and application software development, primarily at its campus in New York City. Each undergraduate degree program includes courses in oral and written communication skills, as well as mathematics.

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