Time (NYSE: TIME) and Pearson, PLC (NYSE:PSO) are both consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitabiliy, risk, earnings and dividends.

Dividends

Time pays an annual dividend of $0.16 per share and has a dividend yield of 1.1%. Pearson, PLC pays an annual dividend of $0.67 per share and has a dividend yield of 7.9%. Time pays out -23.5% of its earnings in the form of a dividend.

Volatility & Risk

Time has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Pearson, PLC has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Earnings and Valuation

This table compares Time and Pearson, PLC’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Time $3.03 billion 0.48 $383.00 million ($0.68) -21.47
Pearson, PLC $5.97 billion 1.16 $752.47 million N/A N/A

Pearson, PLC has higher revenue and earnings than Time.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Time and Pearson, PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Time 0 4 1 0 2.20
Pearson, PLC 5 5 3 0 1.85

Time currently has a consensus price target of $15.20, suggesting a potential upside of 4.11%. Given Time’s stronger consensus rating and higher possible upside, analysts clearly believe Time is more favorable than Pearson, PLC.

Profitability

This table compares Time and Pearson, PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Time -2.18% 7.30% 2.54%
Pearson, PLC N/A N/A N/A

Insider & Institutional Ownership

90.9% of Time shares are held by institutional investors. Comparatively, 2.0% of Pearson, PLC shares are held by institutional investors. 1.9% of Time shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Time beats Pearson, PLC on 8 of the 14 factors compared between the two stocks.

About Time

Time Inc. is a media and content company. The Company offers a portfolio of news and lifestyle brands across a range of interest areas. As of December 31, 2016, the Company’s brands included People, Time, Fortune, Sports Illustrated, InStyle, Real Simple, Southern Living, Entertainment Weekly, Food & Wine, Travel + Leisure and Essence, as well as approximately 50 titles in the United Kingdom. The Company also offers its brands through other media and platforms including licensing, video and television, live events and paid products and services. The Company also offers events, such as the Time 100, Fortune Most Powerful Women, People’s Sexiest Man Alive, Sports Illustrated’s Sportsperson of the Year, the Essence Festival and the Food & Wine Classic in Aspen. It is a subscription marketer in the United States media industry. It also offers its advertisers a range of analytics and research services, including consumer insights, audience measurement and accountability reporting.

About Pearson, PLC

Pearson plc (Pearson) is a learning company. The Company delivers learning through providing a range of educational products and services to institutions, governments, professional bodies and individual learners. The Company operates through three segments, which include North America, Core and Growth. The Company’s North America segment includes Courseware, Assessments and Services businesses in the United States and Canada. The Company’s Core segment includes Courseware, Assessments and Services businesses in more mature markets including the United Kingdom, Australia and Italy. The Company’s Growth segment includes Courseware, Assessments and Services businesses in emerging markets including Brazil, China, India and South Africa. The Company provides content, assessment and digital services to schools, colleges and universities, as well as professional and vocational education to learners to help increase their skills and employability prospects.

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