Tarena International (NASDAQ: TEDU) and Universal Technical Institute (NYSE:UTI) are both small-cap business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitabiliy and earnings.

Dividends

Tarena International pays an annual dividend of $0.14 per share and has a dividend yield of 0.7%. Universal Technical Institute does not pay a dividend. Tarena International pays out 23.0% of its earnings in the form of a dividend.

Profitability

This table compares Tarena International and Universal Technical Institute’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tarena International 14.79% 15.89% 11.60%
Universal Technical Institute -5.12% -6.91% -3.33%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Tarena International and Universal Technical Institute, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tarena International 0 1 2 0 2.67
Universal Technical Institute 0 0 0 0 N/A

Tarena International currently has a consensus target price of $17.80, suggesting a potential downside of 6.95%. Given Tarena International’s higher possible upside, equities analysts plainly believe Tarena International is more favorable than Universal Technical Institute.

Risk & Volatility

Tarena International has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Universal Technical Institute has a beta of 3.52, suggesting that its share price is 252% more volatile than the S&P 500.

Insider & Institutional Ownership

35.5% of Tarena International shares are owned by institutional investors. Comparatively, 59.9% of Universal Technical Institute shares are owned by institutional investors. 28.4% of Universal Technical Institute shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Tarena International and Universal Technical Institute’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tarena International N/A N/A N/A $0.61 31.36
Universal Technical Institute $335.86 million 0.26 $9.65 million ($0.87) -4.06

Universal Technical Institute has higher revenue and earnings than Tarena International. Universal Technical Institute is trading at a lower price-to-earnings ratio than Tarena International, indicating that it is currently the more affordable of the two stocks.

Summary

Tarena International beats Universal Technical Institute on 7 of the 12 factors compared between the two stocks.

Tarena International Company Profile

Tarena International, Inc. (Tarena International) is a holding company. The Company, through its subsidiaries, provides professional education services, including professional information technology (IT) training courses and non-IT training courses across the People’s Republic of China (PRC). It operates through training segment. It offers courses in over 10 IT subjects and approximately three non-IT subjects, and over two kid education programs. It offers an education platform that combines live distance instruction, classroom-based tutoring and online learning modules. It complements the live instruction and tutoring with its learning management system, Tarena Teaching System (TTS). TTS has over five core functions, featuring course content, self-assessment exams, student and teaching staff interaction tools, student management tools and an online student community. In addition, the Company offers Tongcheng and Tongmei featuring IT training courses and non-IT training courses.

Universal Technical Institute Company Profile

Universal Technical Institute, Inc. is a provider of postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by total average undergraduate full-time enrollment and graduates. The Company offers undergraduate degree or diploma programs at approximately 12 campuses across the United States under the banner of various brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (collectively, MMI) and NASCAR Technical Institute (NASCAR Tech). The Company also offers manufacturer specific advanced training (MSAT) programs, including student-paid electives, at its campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers. UTI offers automotive, diesel and industrial, and collision repair and refinishing programs.

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