Comparing Houghton Mifflin Harcourt (HMHC) and Aspen Group (ASPU)

Houghton Mifflin Harcourt (NASDAQ: HMHC) and Aspen Group (NASDAQ:ASPU) are both small-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitability, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for Houghton Mifflin Harcourt and Aspen Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Houghton Mifflin Harcourt 0 4 1 0 2.20
Aspen Group 0 0 1 0 3.00

Houghton Mifflin Harcourt currently has a consensus price target of $13.10, suggesting a potential upside of 35.05%. Aspen Group has a consensus price target of $10.00, suggesting a potential upside of 18.20%. Given Houghton Mifflin Harcourt’s higher possible upside, equities analysts plainly believe Houghton Mifflin Harcourt is more favorable than Aspen Group.

Profitability

This table compares Houghton Mifflin Harcourt and Aspen Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Houghton Mifflin Harcourt -18.59% -17.37% -5.20%
Aspen Group -8.69% -29.44% -14.10%

Valuation & Earnings

This table compares Houghton Mifflin Harcourt and Aspen Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Houghton Mifflin Harcourt $1.37 billion 0.87 -$284.55 million ($2.11) -4.60
Aspen Group $14.25 million 8.07 -$1.10 million ($0.13) -65.08

Aspen Group has lower revenue, but higher earnings than Houghton Mifflin Harcourt. Aspen Group is trading at a lower price-to-earnings ratio than Houghton Mifflin Harcourt, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

6.5% of Aspen Group shares are owned by institutional investors. 1.3% of Houghton Mifflin Harcourt shares are owned by insiders. Comparatively, 15.3% of Aspen Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Houghton Mifflin Harcourt has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Aspen Group has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Summary

Aspen Group beats Houghton Mifflin Harcourt on 8 of the 12 factors compared between the two stocks.

Houghton Mifflin Harcourt Company Profile

Houghton Mifflin Harcourt Company (HMH) is a global learning company, specializing in education solutions across a range of media. The Company operates through two segments: Education and Trade Publishing. As of December 31, 2016, the Company delivered content, services and technology to both educational institutions and consumers, reaching over 50 million students in approximately 150 countries across the world. It sells its products and services across multiple media and distribution channels. Its Education segment provides educational content, services and technology solutions to meet the diverse needs of classrooms. Its Trade Publishing segment develops, markets and sells consumer books in print and digital formats, and licenses book rights to other publishers and electronic businesses in the United States and abroad.

Aspen Group Company Profile

Aspen Group, Inc. is a holding company. The Company’s subsidiary, Aspen University Inc. (Aspen), is dedicated to provide the education experiences taught by professors. Aspen offers approximately two monthly payment programs, a monthly payment plan in which students make payments every month over a fixed period (36, 39 or 72 months depending on the degree program) and a monthly installment plan in which students pay over three monthly installments (day 1, day 31 and day 61 after the start of each course). As of June 30, 2016, Aspen had 2,074 students paying tuition through either of the monthly payment methods. It offers certificate programs and associate, bachelor’s, master’s and doctoral degree programs in a range of areas, including nursing, business, education and professional studies. It offers a range of nursing degrees, including Master of Science in Nursing, Master of Science in Nursing-Nursing Education and Master of Science in Nursing-Nursing Administration and Management.

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