Puxin (NYSE:NEW) and China Distance Education (NYSE:DL) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.
This table compares Puxin and China Distance Education’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Distance Education||6.98%||17.89%||4.89%|
This is a summary of recent ratings for Puxin and China Distance Education, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Distance Education||0||0||0||0||N/A|
Puxin presently has a consensus price target of $26.00, indicating a potential upside of 306.89%. Given Puxin’s higher possible upside, research analysts plainly believe Puxin is more favorable than China Distance Education.
Institutional & Insider Ownership
7.8% of Puxin shares are held by institutional investors. Comparatively, 21.8% of China Distance Education shares are held by institutional investors. 41.6% of China Distance Education shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Puxin and China Distance Education’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Puxin||$204.47 million||2.91||-$63.34 million||N/A||N/A|
|China Distance Education||$166.67 million||1.45||$11.62 million||N/A||N/A|
China Distance Education has lower revenue, but higher earnings than Puxin.
China Distance Education beats Puxin on 6 of the 10 factors compared between the two stocks.
Puxin Limited, through its subsidiaries, provides after-school education services in China. It offers a range of K-12 and study-abroad tutoring programs designed to help students prepare for admission tests and applications for top schools, universities, and graduate programs in China and other countries. The company also provides group class courses; personalized tutoring courses; English tutoring services for children in kindergarten; and extra-curricular courses to students, such as painting, calligraphy, music, debate, and science, as well as offers Web-based and mobile-based platforms for K-12 tutoring services. In addition, it sells education materials; and provides advertisement, study consulting, and training services. As of March 31, 2018, the company had a network of 397 learning centers; and 4 schools providing extra-curricular education courses. Puxin Limited was founded in 2014 and is headquartered in Beijing, 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 in three segments: Professional 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 legal professional qualification 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, 2018, it operated 32 Websites, including its primary Website cdeledu.com. The company also 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. In addition, it provides business start-up training services to university students, job seekers, and individuals; offline accounting, tax, healthcare, and legal professional training services; courseware production and online platform development services; and mobile accounting, healthcare, engineering and construction, and legal courses through an app, 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.