Comparing BuzzFeed (NASDAQ:BZFD) and Pearson (NYSE:PSO)

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

Institutional & Insider Ownership

2.1% of Pearson shares are held by institutional investors. Comparatively, 37.6% of BuzzFeed shares are held by institutional investors. 0.1% of Pearson shares are held by company insiders. Comparatively, 20.3% of BuzzFeed shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Pearson and BuzzFeed”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pearson	$4.72 billion	1.78	$441.77 million	N/A	N/A
BuzzFeed	$185.27 million	0.14	-$57.72 million	($1.53)	-0.46

Pearson has higher revenue and earnings than BuzzFeed.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pearson	N/A	N/A	N/A
BuzzFeed	-31.16%	-67.42%	-27.72%

Analyst Recommendations

This is a breakdown of current ratings for Pearson and BuzzFeed, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pearson	0	4	2	1	2.57
BuzzFeed	1	1	0	0	1.50

BuzzFeed has a consensus target price of $1.00, indicating a potential upside of 41.84%. Given BuzzFeed’s higher possible upside, analysts clearly believe BuzzFeed is more favorable than Pearson.

Volatility and Risk

Pearson has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, BuzzFeed has a beta of 3.43, meaning that its share price is 243% more volatile than the S&P 500.

Summary

Pearson beats BuzzFeed on 9 of the 13 factors compared between the two stocks.

About Pearson

Pearson plc offers educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally. The company operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills, and Higher Education. The Assessment & Qualifications segment offers Pearson VUE, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications and associated courseware. The Virtual Learning segment provides virtual schools and online program management services. The English Language Learning segment offers Pearson test of English, institutional courseware, and English online solutions. The Workforce Skills offers BTEC, GED, TalentLens, Faethm, Credly, Pearson college, and apprenticeships. The Higher Education segment engages in the US, Canadian, and international higher education courseware businesses. The company was founded in 1844 and is headquartered in London, the United Kingdom.

About BuzzFeed

BuzzFeed, Inc., a digital media company, distributes content across owned and operated, as well as third-party platforms. The company offers BuzzFeed, a go-to authority for entertainment, pop culture, and Internet with articles, lists, quizzes, videos, and original series; BuzzFeed News, a pocket friendly newsroom; Tasty, a platform for food content; HuffPost, media platform for news, politics, opinion, entertainment, features, and lifestyle content. It also provides display, programmatic, and video advertising on its owned and operated sites and applications. BuzzFeed, Inc. is headquartered in New York, New York.