Critical Contrast: Strayer Education (STRA) and TAL Education Group (TAL)
Strayer Education (NASDAQ: STRA) and TAL Education Group (NYSE:TAL) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitability and risk.
Earnings & Valuation
This table compares Strayer Education and TAL Education Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Strayer Education||$449.07 million||1.88||$77.90 million||$3.21||24.60|
|TAL Education Group||$1.17 billion||12.95||$182.99 million||$0.24||126.91|
TAL Education Group has higher revenue and earnings than Strayer Education. Strayer Education is trading at a lower price-to-earnings ratio than TAL Education Group, indicating that it is currently the more affordable of the two stocks.
Strayer Education pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. TAL Education Group does not pay a dividend. Strayer Education pays out 31.2% of its earnings in the form of a dividend.
This table compares Strayer Education and TAL Education Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TAL Education Group||11.14%||19.47%||7.05%|
Insider & Institutional Ownership
92.4% of Strayer Education shares are held by institutional investors. Comparatively, 57.6% of TAL Education Group shares are held by institutional investors. 6.7% of Strayer Education shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Volatility and Risk
Strayer Education has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, TAL Education Group has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500.
This is a summary of current ratings and target prices for Strayer Education and TAL Education Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TAL Education Group||0||2||9||0||2.82|
Strayer Education currently has a consensus price target of $83.75, indicating a potential upside of 6.08%. TAL Education Group has a consensus price target of $24.52, indicating a potential downside of 20.04%. Given Strayer Education’s higher probable upside, analysts clearly believe Strayer Education is more favorable than TAL Education Group.
TAL Education Group beats Strayer Education on 9 of the 16 factors compared between the two stocks.
About Strayer Education
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.
About TAL Education Group
TAL Education Group is a holding company for a group of companies engaged in provision of after-school tutoring programs for primary and secondary school students in the People’s Republic of China (the PRC). The Company is a K-12 after-school tutoring services provider in China. The Company’s Xueersi Peiyou small classes course consists of approximately four semesters, which include approximately two school semesters in Spring and Fall, and approximately two holiday semesters in summer and winter. It operates a Website, www.jzb.com, which is an online education platform in China. It offers personalized premium services under its Zhikang brand. It offers online courses through www.xueersi.com. Through www.xueersi.com, the Company offers online courses on mathematics, English, Chinese, physics, chemistry, biology and other subjects. It also offers select online courses through other Websites. The Company has over 10 call centers in Beijing, Shanghai, Tianjin, Guangzhou and Shenzhen.
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