Analyzing New Oriental Education & Tech Grp (EDU) & TAL Education (TAL)

New Oriental Education & Tech Grp (NYSE: EDU) and TAL Education (NYSE:TAL) are both large-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Analyst Recommendations

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This is a summary of current recommendations for New Oriental Education & Tech Grp and TAL Education, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Oriental Education & Tech Grp 0 1 7 0 2.88
TAL Education 0 3 6 0 2.67

New Oriental Education & Tech Grp presently has a consensus price target of $101.17, indicating a potential upside of 8.61%. TAL Education has a consensus price target of $30.72, indicating a potential downside of 16.09%. Given New Oriental Education & Tech Grp’s stronger consensus rating and higher possible upside, analysts clearly believe New Oriental Education & Tech Grp is more favorable than TAL Education.

Profitability

This table compares New Oriental Education & Tech Grp and TAL Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Oriental Education & Tech Grp 13.92% 16.19% 9.37%
TAL Education 10.55% 19.59% 7.22%

Earnings and Valuation

This table compares New Oriental Education & Tech Grp and TAL Education’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Oriental Education & Tech Grp $1.80 billion 8.16 $274.45 million $1.74 53.53
TAL Education $1.04 billion 17.16 $116.88 million $0.22 166.41

New Oriental Education & Tech Grp has higher revenue and earnings than TAL Education. New Oriental Education & Tech Grp is trading at a lower price-to-earnings ratio than TAL Education, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

New Oriental Education & Tech Grp has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500. Comparatively, TAL Education has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Institutional & Insider Ownership

79.7% of New Oriental Education & Tech Grp shares are owned by institutional investors. Comparatively, 55.9% of TAL Education shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

New Oriental Education & Tech Grp beats TAL Education on 10 of the 13 factors compared between the two stocks.

About New Oriental Education & Tech Grp

New Oriental Education & Technology Group Inc. is a provider of private educational services in the People’s Republic of China (the PRC). The Company provides educational services under its New Oriental brand. The Company operates through seven segments, which include language training and test preparation, primary and secondary school education, online education, content development and distribution, pre-school education, overseas study consulting services and study tour. The Company offers a range of educational programs, services and products, consisting of English and other foreign language training, test preparation courses for admissions and assessment tests in the United States, the People’s Republic of China and Commonwealth countries, primary and secondary school education, development and distribution of educational content, software and other technology, and online education.

About TAL Education

TAL Education Group, through its subsidiaries, provides K-12 after-school tutoring services in the People's Republic of China. It offers tutoring services to K-12 students covering various academic subjects, including mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. The company also provides tutoring services primarily through small classes, including Xueersi Peiyou, Mobby, and Firstleap tutoring services; personalized premium services under Izhikang name; and online courses. In addition, it operates jzb.com, an online education platform that serves as a gateway to its online courses through xueersi.com and other Websites, which offer college entrance examinations, high school entrance examinations, graduate school entrance examinations, preschool education, Chinese composition, and raising infants and toddlers. Further, the company provides educational content through mobile applications; operates mmbang.com and the Mama Bang app, an online platform focusing on children, baby, and maternity market; and provides consulting services for overseas studies and test courses preparation under the Shunshun Liuxue name. Additionally, it offers tutoring services for students aged two through twelve under the Mobby brand; education and management consulting, and investment management and consulting services; and develops and sells software and networks, as well as offers related consulting services. As of February 28, 2017, the company's educational network included 507 learning centers and 401 service centers in 30 cities. TAL Education Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.

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