Critical Analysis: Educational Development (EDUC) & Its Competitors

Educational Development (NASDAQ:EDUC) is one of 259 publicly-traded companies in the “Media” industry, but how does it contrast to its peers? We will compare Educational Development to related companies based on the strength of its valuation, dividends, analyst recommendations, risk, earnings, institutional ownership and profitability.

Dividends

Educational Development pays an annual dividend of $0.10 per share and has a dividend yield of 7.7%. Educational Development pays out 43.5% of its earnings in the form of a dividend. As a group, “Media” companies pay a dividend yield of 5.1% and pay out 105.1% of their earnings in the form of a dividend. Educational Development is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Educational Development and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Educational Development	$20.56 million	$2.33 million	5.65
Educational Development Competitors	$3.30 billion	-$7.90 million	14.95

Educational Development’s peers have higher revenue, but lower earnings than Educational Development. Educational Development is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Insider & Institutional Ownership

19.6% of Educational Development shares are owned by institutional investors. Comparatively, 38.4% of shares of all “Media” companies are owned by institutional investors. 11.9% of Educational Development shares are owned by company insiders. Comparatively, 18.0% of shares of all “Media” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Educational Development and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Educational Development	0	1	0	0	2.00
Educational Development Competitors	2278	6893	10854	477	2.46

As a group, “Media” companies have a potential upside of 23.79%. Given Educational Development’s peers stronger consensus rating and higher probable upside, analysts clearly believe Educational Development has less favorable growth aspects than its peers.

Profitability

This table compares Educational Development and its peers’ 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%
Educational Development Competitors	-20.08%	-47.96%	-5.10%

Risk & Volatility

Educational Development has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Educational Development’s peers have a beta of 0.96, suggesting that their average share price is 4% less volatile than the S&P 500.

Summary

Educational Development peers beat Educational Development on 9 of the 15 factors compared.

Educational Development Company Profile

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.