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

Insider and Institutional Ownership

92.4% of Strayer Education shares are owned by institutional investors. Comparatively, 96.2% of Grand Canyon Education shares are owned by institutional investors. 6.7% of Strayer Education shares are owned by insiders. Comparatively, 3.0% of Grand Canyon Education shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Strayer Education pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Grand Canyon Education does not pay a dividend. Strayer Education pays out 31.2% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and target prices for Strayer Education and Grand Canyon Education, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Strayer Education 0 3 1 0 2.25
Grand Canyon Education 0 0 4 0 3.00

Strayer Education currently has a consensus target price of $83.75, indicating a potential upside of 8.41%. Grand Canyon Education has a consensus target price of $74.67, indicating a potential downside of 6.68%. Given Strayer Education’s higher probable upside, equities research analysts clearly believe Strayer Education is more favorable than Grand Canyon Education.

Profitability

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

Net Margins Return on Equity Return on Assets
Strayer Education 7.90% 17.65% 11.15%
Grand Canyon Education 18.77% 21.77% 15.47%

Risk & Volatility

Strayer Education has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Grand Canyon Education has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Strayer Education $449.07 million 1.84 $77.90 million $3.21 24.07
Grand Canyon Education $921.61 million 4.18 $310.30 million $3.62 22.10

Grand Canyon Education has higher revenue and earnings than Strayer Education. Grand Canyon 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.

Summary

Grand Canyon Education beats Strayer Education on 12 of the 16 factors compared between the two stocks.

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.

Grand Canyon Education Company Profile

Grand Canyon Education, Inc. is engaged in the provision of postsecondary education. The Company is a regionally accredited university. The Company offers the degrees, including Doctor of Education, Doctor of Business Administration, Doctor of Nursing Practice, Doctor of Philosophy, Education Specialist, Master of Divinity, Master of Arts, Master of Education, Master of Business Administration and Master of Public Administration, Master of Public Health, Master of Science, Bachelor of Arts, Bachelor of Science, and a range of programs for its degrees. It also offers certificate programs, which consist of a series of courses focused on a particular area of study for both the post-baccalaureate and post-graduate students. The Company offers its ground-based programs to students through three 15-week semesters in a calendar year and to online students in courses that generally range from 5 to 16 weeks throughout the calendar year.

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