New Oriental Education & Tech Grp (NYSE:EDU) and China Distance Education (NYSE:DL) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for New Oriental Education & Tech Grp and China Distance Education, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Oriental Education & Tech Grp 1 1 4 0 2.50
China Distance Education 0 0 0 0 N/A

New Oriental Education & Tech Grp currently has a consensus target price of $108.00, indicating a potential upside of 75.50%. Given New Oriental Education & Tech Grp’s higher probable upside, equities analysts clearly believe New Oriental Education & Tech Grp is more favorable than China Distance Education.

Earnings and Valuation

This table compares New Oriental Education & Tech Grp and China Distance Education’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Oriental Education & Tech Grp $2.45 billion 3.59 $296.13 million $1.87 32.91
China Distance Education $130.99 million 2.02 $14.93 million N/A N/A

New Oriental Education & Tech Grp has higher revenue and earnings than China Distance Education.

Profitability

This table compares New Oriental Education & Tech Grp and China Distance Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Oriental Education & Tech Grp 12.10% 15.17% 8.36%
China Distance Education 5.06% 12.48% 3.31%

Risk and Volatility

New Oriental Education & Tech Grp has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, China Distance Education has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.

Institutional and Insider Ownership

88.8% of New Oriental Education & Tech Grp shares are held by institutional investors. Comparatively, 22.1% of China Distance Education shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

New Oriental Education & Tech Grp beats China Distance Education on 9 of the 11 factors compared between the two stocks.

About New Oriental Education & Tech Grp

New Oriental Education & Technology Group Inc. provides private educational services under the New Oriental brand in the People's Republic of China. The company operates through Language Training and Test Preparation, Primary and Secondary School Education, Online Education, Content Development and Distribution, Pre-School Education, Overseas Study Consulting Services, and Study Tour segments. It offers test preparation courses to students taking language and entrance exams used by educational institutions in the United States, the People's Republic of China, and the Commonwealth countries; and after-school tutoring courses for middle and high school students to achieve better scores on entrance exams for admission into high schools or higher education institutions, as well as for children to teach English. The company also provides language training courses consisting of English, as well as other foreign languages, such as German, Japanese, French, Korean, Italian, and Spanish; operates full-time private primary and secondary boarding school in Yangzhou seeking a full curriculum taught in Chinese and English; develops and edits educational materials for language training and test preparation comprising books, software, CD-ROMs, magazines, and other periodicals; and offers online education programs on its Websites koolearn.com and koo.cn. In addition, it offers overseas studies consulting; pre-school education; and a pilot program that permits third parties in small cities to provide its English and kindergarten programs, as well as overseas study tour services. As of May 31, 2017, the company offered educational programs, services, and products to students through a network of 77 schools, 855 learning centers, and 20 bookstores. The company was founded in 1993 and is headquartered in Beijing, the People's Republic of China.

About China Distance Education

China Distance Education Holdings Limited provides online and offline education services, and sells related products in the People's Republic of China. It operates through three segments: Online Education Services, Business Start-Up Training Services, and The Sale of Learning Simulation Software. The company offers online professional education services in accounting, healthcare, and engineering and construction industries; and other professional education courses, such as online test-preparation courses for the national judicial examination and self-taught learners pursuing higher education diplomas or degrees, test preparation courses for university students, accounting practical skills training courses, and online language courses. Its online courses feature pre-recorded audio-video lectures taught by experts; and other content, such as course outlines, exercise questions, mock exams, and frequently asked questions and answers. The company's online lectures are supplemented by its proprietary Learning Management System, which tracks individual study progress, records course notes, and collects incorrectly answered questions. As of September 30, 2017, it operated 25 Websites, including its primary Website cdeledu.com. In addition, the company operates an Open Learning Platform, a proprietary education platform to share educational content and deliver live courses online; and sells proprietary books and reference materials. Further, it provides business start-up training courses to university students, job seekers, and individuals; offline accounting and healthcare professional training, courseware production, and online platform development services; and mobile accounting, engineering and construction, healthcare, and legal courses through an app on Android and Apple iOS tablets and smart phones, as well as sells learning simulation software to the college market. The company was founded in 2000 and is based in Beijing, the People's Republic of China.

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