Critical Analysis: GP Strategies Corporation (GPX) & ITT Educational Services (NYSE:ESI)

GP Strategies Corporation (NYSE: GPX) and ITT Educational Services (NYSE:ESI) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitabiliy, valuation, risk, dividends and earnings.

Valuation and Earnings

This table compares GP Strategies Corporation and ITT Educational Services’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
GP Strategies Corporation	$502.87 million	0.96	$39.32 million	$1.28	22.46
ITT Educational Services	N/A	N/A	N/A	$0.86	0.42

GP Strategies Corporation has higher revenue and earnings than ITT Educational Services. ITT Educational Services is trading at a lower price-to-earnings ratio than GP Strategies Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GP Strategies Corporation and ITT Educational Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GP Strategies Corporation	4.27%	12.56%	6.67%
ITT Educational Services	2.44%	10.57%	2.86%

Analyst Ratings

This is a summary of current recommendations for GP Strategies Corporation and ITT Educational Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GP Strategies Corporation	0	1	1	0	2.50
ITT Educational Services	2	0	0	0	1.00

GP Strategies Corporation currently has a consensus target price of $29.50, suggesting a potential upside of 2.61%. Given GP Strategies Corporation’s stronger consensus rating and higher possible upside, research analysts plainly believe GP Strategies Corporation is more favorable than ITT Educational Services.

Risk and Volatility

GP Strategies Corporation has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, ITT Educational Services has a beta of 1.96, indicating that its share price is 96% more volatile than the S&P 500.

Institutional & Insider Ownership

87.7% of GP Strategies Corporation shares are owned by institutional investors. Comparatively, 62.7% of ITT Educational Services shares are owned by institutional investors. 25.7% of GP Strategies Corporation shares are owned by company insiders. Comparatively, 3.8% of ITT Educational Services shares are owned 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.

Summary

GP Strategies Corporation beats ITT Educational Services on 10 of the 11 factors compared between the two stocks.

GP Strategies Corporation Company Profile

GP Strategies Corporation (GP Strategies) is a global performance improvement solutions provider of sales and technical training, e-learning solutions, management consulting and engineering services. The Company operates in five segments: Learning Solutions, Professional & Technical Services, Sandy Training & Marketing, RWD and Energy Services. Its clients include companies and governmental and other commercial customers in a variety of industries. It serves companies in the automotive, steel, oil and gas, power, chemical, electronics and technology, manufacturing, software, financial, retail, healthcare and food and beverage industries, as well as government agencies. On December 31, 2011, GP Strategies Corporation merged with and into its operating subsidiary, General Physics Corporation (General Physics). In April 2014, the Company acquired Effective-People and Effective-Learning companies.

ITT Educational Services Company Profile

ITT Educational Services, Inc. is a provider of postsecondary degree programs in the United States. The Company offers master, bachelor and associate degree programs to over 45,000 students, and short-term information technology and business learning solutions for career advancers and other professionals. It has approximately 138 campus locations in over 40 states. It offers online programs to students in all over 50 states. It designs its education programs, after consultation with employers and other constituents, to allow graduates prepare for careers in different fields involving their areas of study. It provides career-oriented education programs under the ITT Technical Institute name and the Daniel Webster College (DWC) name. The ITT Technical Institutes offers over 50 education programs in various fields of study across business, drafting and design, electronics technology, criminal justice, information technology (IT), and Breckinridge School of nursing and health sciences.