Contrasting Gannett Co. (GCI) & Pearson, PLC (PSO)

Gannett Co. (NYSE: GCI) and Pearson, PLC (NYSE:PSO) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitabiliy, risk, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Gannett Co. and Pearson, PLC, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gannett Co.	0	1	1	0	2.50
Pearson, PLC	5	4	2	0	1.73

Gannett Co. presently has a consensus price target of $16.00, suggesting a potential upside of 78.57%. Given Gannett Co.’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Gannett Co. is more favorable than Pearson, PLC.

Earnings and Valuation

This table compares Gannett Co. and Pearson, PLC’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Gannett Co.	$3.16 billion	0.32	$317.33 million	$0.08	112.00
Pearson, PLC	$5.90 billion	1.17	$744.15 million	N/A	N/A

Pearson, PLC has higher revenue and earnings than Gannett Co..

Insider and Institutional Ownership

84.0% of Gannett Co. shares are held by institutional investors. Comparatively, 2.0% of Pearson, PLC shares are held by institutional investors. 0.7% of Gannett Co. shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Gannett Co. and Pearson, PLC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gannett Co.	0.33%	12.11%	4.29%
Pearson, PLC	N/A	N/A	N/A

Volatility and Risk

Gannett Co. has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Pearson, PLC has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500.

Dividends

Gannett Co. pays an annual dividend of $0.64 per share and has a dividend yield of 7.1%. Pearson, PLC pays an annual dividend of $0.67 per share and has a dividend yield of 7.9%. Gannett Co. pays out 800.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Gannett Co. beats Pearson, PLC on 8 of the 14 factors compared between the two stocks.

About Gannett Co.

Gannett Co., Inc. is a media company. The Company operates as a newspaper publisher in the United States. As of December 25, 2016, it owned ReachLocal, Inc. (ReachLocal), a digital marketing solutions company; the USA TODAY NETWORK (made up of USA TODAY including digital sites and affiliates (USAT) and 109 local media organizations in 34 states in the United States and Guam), and Newsquest Media Group Ltd. (Newsquest), the Company’s subsidiary operating in the United Kingdom. The Company’s segments include Publishing, ReachLocal, and a Corporate and Other category. The publishing segment comprises the USA TODAY NETWORK and Newsquest. Its publishing operations also include commercial printing and distribution, marketing and data services. It also reaches small and medium sized businesses with digital marketing solutions principally through ReachLocal. ReachLocal is focused on local businesses and on providing a total digital marketing solution.

About Pearson, PLC

Pearson plc (Pearson) is a learning company. The Company delivers learning through providing a range of educational products and services to institutions, governments, professional bodies and individual learners. The Company operates through three segments, which include North America, Core and Growth. The Company’s North America segment includes Courseware, Assessments and Services businesses in the United States and Canada. The Company’s Core segment includes Courseware, Assessments and Services businesses in more mature markets including the United Kingdom, Australia and Italy. The Company’s Growth segment includes Courseware, Assessments and Services businesses in emerging markets including Brazil, China, India and South Africa. The Company provides content, assessment and digital services to schools, colleges and universities, as well as professional and vocational education to learners to help increase their skills and employability prospects.