China Distance Education (NYSE:DL) and K12 (NYSE:LRN) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Insider and Institutional Ownership
22.1% of China Distance Education shares are owned by institutional investors. Comparatively, 82.8% of K12 shares are owned by institutional investors. 9.6% of K12 shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares China Distance Education and K12’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|China Distance Education||5.06%||12.48%||3.31%|
Volatility & Risk
China Distance Education has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, K12 has a beta of -0.04, meaning that its share price is 104% less volatile than the S&P 500.
Valuation and Earnings
This table compares China Distance Education and K12’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|China Distance Education||$130.99 million||1.86||$14.93 million||N/A||N/A|
|K12||$917.73 million||0.99||$27.62 million||$0.68||33.10|
K12 has higher revenue and earnings than China Distance Education.
This is a breakdown of recent ratings and price targets for China Distance Education and K12, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|China Distance Education||0||0||0||0||N/A|
K12 has a consensus price target of $23.00, suggesting a potential upside of 2.18%. Given K12’s higher probable upside, analysts plainly believe K12 is more favorable than China Distance Education.
K12 beats China Distance Education on 8 of the 12 factors compared between the two stocks.
China Distance Education Company Profile
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.
K12 Company Profile
K12 Inc., a technology-based education company, together with its subsidiaries, provides online curriculum, software systems, and educational services to facilitate individualized learning for students primarily in kindergarten through 12th grade in the United States and internationally. The company also offers curriculum and technology solutions for full-time virtual and blended programs; full-time virtual programs, semester courses, and supplemental educational products; teacher training, teaching, and other academic and technology support services to public schools, school districts, private schools, charter schools, early childhood learning centers, and corporate partners. In addition, it provides FuelEd suite of offerings, such as K12 curriculum, FuelEd online courses, and FuelEd anywhere learning systems; Middlebury interactive languages; Stride; and the Big Universe literacy solution. Further, the company operates online private schools, including The K12 International Academy, the George Washington University Online High School, and the Keystone School. Additionally, it provides access to the online lessons and curriculum through proprietary learning management system; learning kits; student computers; and management, technology, and educational services. The company sells individual K-8 online courses and supplemental educational products directly to families. K12 Inc. was founded in 2000 and is headquartered in Herndon, Virginia.
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