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

Insider & Institutional Ownership

2.0% of Pearson, PLC shares are held by institutional investors. Comparatively, 91.7% of Time shares are held by institutional investors. 1.9% of Time shares are held 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.

Analyst Ratings

This is a breakdown of current recommendations for Pearson, PLC and Time, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pearson, PLC 5 4 2 0 1.73
Time 0 3 1 0 2.25

Time has a consensus target price of $15.25, indicating a potential upside of 12.55%. Given Time’s stronger consensus rating and higher probable upside, analysts clearly believe Time is more favorable than Pearson, PLC.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pearson, PLC $6.25 billion 1.05 $1.09 billion N/A N/A
Time $2.96 billion 0.46 $384.00 million ($1.30) -10.42

Pearson, PLC has higher revenue and earnings than Time.

Risk & Volatility

Pearson, PLC has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500. Comparatively, Time has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Pearson, PLC N/A N/A N/A
Time -4.34% 7.06% 2.39%

Dividends

Pearson, PLC pays an annual dividend of $0.67 per share and has a dividend yield of 8.4%. Time pays an annual dividend of $0.16 per share and has a dividend yield of 1.2%. Time pays out -12.3% of its earnings in the form of a dividend.

Summary

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

Pearson, PLC Company Profile

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.

Time Company Profile

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.

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