Head to Head Survey: New Oriental (EDU) and The Graham (GHC)

New Oriental (NYSE: EDU) and The Graham (NYSE:GHC) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Dividends

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The Graham pays an annual dividend of $5.32 per share and has a dividend yield of 0.9%. New Oriental does not pay a dividend.

Institutional and Insider Ownership

78.1% of New Oriental shares are owned by institutional investors. Comparatively, 69.0% of The Graham shares are owned by institutional investors. 15.5% of New Oriental shares are owned by company insiders. Comparatively, 22.5% of The Graham shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares New Oriental and The Graham’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Oriental $1.80 billion 8.88 $274.45 million $1.74 58.24
The Graham $2.59 billion 1.22 $302.04 million N/A N/A

The Graham has higher revenue and earnings than New Oriental.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for New Oriental and The Graham, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Oriental 0 1 7 0 2.88
The Graham 0 0 0 0 N/A

New Oriental presently has a consensus price target of $103.11, indicating a potential upside of 1.75%. Given New Oriental’s higher possible upside, equities research analysts plainly believe New Oriental is more favorable than The Graham.

Volatility and Risk

New Oriental has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, The Graham has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Profitability

This table compares New Oriental and The Graham’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Oriental 12.83% 15.23% 8.74%
The Graham 12.14% 5.97% 3.45%

Summary

New Oriental beats The Graham on 9 of the 13 factors compared between the two stocks.

New Oriental Company Profile

New Oriental Education & Technology Group Inc. provides private educational services under the New Oriental brand in the People's Republic of China. The company operates through Language Training and Test Preparation, Primary and Secondary School Education, Online Education, Content Development and Distribution, Pre-School Education, Overseas Study Consulting Services, and Study Tour segments. It offers test preparation courses to students taking language and entrance exams used by educational institutions in the United States, the People's Republic of China, and the Commonwealth countries; and after-school tutoring courses for middle and high school students to achieve better scores on entrance exams for admission into high schools or higher education institutions, as well as for children to teach English. The company also provides language training courses consisting of English, as well as other foreign languages, such as German, Japanese, French, Korean, Italian, and Spanish; operates full-time private primary and secondary boarding school in Yangzhou seeking a full curriculum taught in Chinese and English; develops and edits educational materials for language training and test preparation comprising books, software, CD-ROMs, magazines, and other periodicals; and offers online education programs on its Websites koolearn.com and koo.cn. In addition, it offers overseas studies consulting; pre-school education; and a pilot program that permits third parties in small cities to provide its English and kindergarten programs, as well as overseas study tour services. As of May 31, 2017, the company offered educational programs, services, and products to students through a network of 77 schools, 855 learning centers, and 20 bookstores. The company was founded in 1993 and is headquartered in Beijing, the People's Republic of China.

The Graham Company Profile

Graham Holdings Company, through its subsidiaries, operates as a diversified education and media company worldwide. It provides a range of certificate, diploma, and degree programs, as well as online education services; and test preparation business services in pre-college, graduate, health, and bar review, as well as publishes and sells test preparation and other books through retail channels. The company also offers training, test preparation services, and degrees for accounting and financial services professionals, as well as professional training courses; English-language training, academic preparation programs, and test preparation for English proficiency exams for students; and A-level examination preparation services, as well as operates three collages, one higher education institution, and one online learning institution. In addition, it owns and operates seven television stations; and provides social-media management tools designed to connect newsrooms with their users. Further, the company publishes Slate, an online magazine and Website; and two French-language news magazine Websites at slate.fr and slateafrique.com. Additionally, it provides marketing solutions on social, mobile, and video platforms; home health and hospice services; burners, igniters, dampers, and controls for combustion processes in electric utility and industrial applications; and screw jacks, linear actuators and related linear motion products, and lifting systems to customers across renewable energy, metals and metalworking, oil and gas, satellite antennae, and material handling sectors. The company also manufactures electrical components and assemblies for medical equipment, transportation, industrial, and appliance products. The company was formerly known as The Washington Post Company and changed its name to Graham Holdings Company in November 2013. Graham Holdings Company was founded in 1877 and is based in Arlington, Virginia.

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