Townsquare Media (NYSE:TSQ) & Educational Development (NASDAQ:EDUC) Head-To-Head Survey

Educational Development (NASDAQ:EDUC) and Townsquare Media (NYSE:TSQ) are both small-cap communication services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Profitability

This table compares Educational Development and Townsquare Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Educational Development	9.75%	-18.23%	-12.73%
Townsquare Media	-11.82%	-5.59%	0.51%

Volatility and Risk

Educational Development has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Townsquare Media has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Educational Development and Townsquare Media, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Educational Development	1	0	0	0	1.00
Townsquare Media	1	1	1	0	2.00

Townsquare Media has a consensus target price of $10.00, suggesting a potential upside of 69.49%. Given Townsquare Media’s stronger consensus rating and higher probable upside, analysts plainly believe Townsquare Media is more favorable than Educational Development.

Earnings & Valuation

This table compares Educational Development and Townsquare Media”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Educational Development	$20.56 million	0.56	$2.33 million	$0.23	5.91
Townsquare Media	$427.38 million	0.25	-$9.75 million	($2.88)	-2.05

Educational Development has higher earnings, but lower revenue than Townsquare Media. Townsquare Media is trading at a lower price-to-earnings ratio than Educational Development, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

19.6% of Educational Development shares are owned by institutional investors. Comparatively, 71.7% of Townsquare Media shares are owned by institutional investors. 11.9% of Educational Development shares are owned by company insiders. Comparatively, 30.3% of Townsquare Media shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Educational Development pays an annual dividend of $0.10 per share and has a dividend yield of 7.4%. Townsquare Media pays an annual dividend of $0.80 per share and has a dividend yield of 13.6%. Educational Development pays out 43.5% of its earnings in the form of a dividend. Townsquare Media pays out -27.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Townsquare Media has increased its dividend for 3 consecutive years. Townsquare Media is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Townsquare Media beats Educational Development on 12 of the 17 factors compared between the two stocks.

About Educational Development

Educational Development Corporation, a publishing company, operates as a publisher of educational children's books in the United States. It operates through two segments, PaperPie and Publishing. The company offers various books, including touchy-feely board books, activity books and flashcards, adventure and search books, art books, sticker books, and foreign language books, as well as internet-linked books comprising science and math titles, and chapter books and novels. It markets its products to retail accounts, which include book, school supply, toy and gift stores and museums, through commissioned sales representatives, trade and specialty wholesalers, and its internal tele-sales group; and through a network of independent sales consultants through internet sales, direct sales, home shows, and book fairs. Educational Development Corporation was incorporated in 1965 and is headquartered in Tulsa, Oklahoma.

About Townsquare Media

Townsquare Media, Inc. operates as a digital media and marketing solutions company in small and medium-sized businesses. It operates through three segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising. The Subscription Digital Marketing Solutions segment offers website design, creation, and development, as well as hosting services; and search engine optimization, online directory optimization, e-commerce solutions, online reputation monitoring, social media management, appointment scheduling, payment and invoice, customer management, and email and SMS marketing services. The Digital Advertising segment provides digital advertising on its owned and operated, digital programmatic advertising, and data analytics and management platform. The Broadcast Advertising segment engages in the sale of advertising on local radio stations to local, regional, and national spot advertisers, as well as national network advertisers. It also owns and operates live events, including concerts, expositions, and other experiential events; and operates local media under the WYRK.com, WJON.com, and NJ101.5.com brands, as well as national music under the XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com brands. The company was formerly known as Regent Communications, Inc. and changed its name to Townsquare Media, Inc. in May 2010. Townsquare Media, Inc. is headquartered in Purchase, New York.