Contrasting Pearson (PSO) & John Wiley & Sons (JW.A)

Pearson (NYSE: PSO) and John Wiley & Sons (NYSE:JW.A) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Profitability

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This table compares Pearson and John Wiley & Sons’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pearson N/A N/A N/A
John Wiley & Sons 10.44% 18.07% 7.09%



Dividends

Pearson pays an annual dividend of $0.33 per share and has a dividend yield of 3.0%. John Wiley & Sons pays an annual dividend of $1.28 per share and has a dividend yield of 1.9%. Pearson pays out 47.1% of its earnings in the form of a dividend. John Wiley & Sons pays out 42.7% 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.

Analyst Recommendations

This is a summary of recent ratings for Pearson and John Wiley & Sons, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pearson 1 1 2 0 2.25
John Wiley & Sons 0 2 0 0 2.00

John Wiley & Sons has a consensus price target of $60.00, indicating a potential downside of 9.71%. Given John Wiley & Sons’ higher probable upside, analysts plainly believe John Wiley & Sons is more favorable than Pearson.

Risk & Volatility

Pearson has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, John Wiley & Sons has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Insider & Institutional Ownership

1.3% of Pearson shares are owned by institutional investors. Comparatively, 74.9% of John Wiley & Sons shares are owned by institutional investors. 1.0% of John Wiley & Sons shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Pearson and John Wiley & Sons’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pearson $5.81 billion 1.47 $523.25 million $0.70 15.61
John Wiley & Sons $1.72 billion 2.20 $113.64 million $3.00 22.15

Pearson has higher revenue and earnings than John Wiley & Sons. Pearson is trading at a lower price-to-earnings ratio than John Wiley & Sons, indicating that it is currently the more affordable of the two stocks.

Summary

John Wiley & Sons beats Pearson on 11 of the 16 factors compared between the two stocks.

Pearson Company Profile

Pearson plc provides educational materials and learning technologies for teachers and students worldwide. It operates through North America, Growth, and Core segments. The company offers courseware services, including curriculum materials provided in book form and/or via access to digital content; and assessments, such as test development, processing, and scoring services. It also operates schools, colleges, and universities; and English language teaching centers, as well as provides online learning services in partnership with universities and other academic institutions. In addition, the company sells books; delivers and installs off -the-shelf software; and provides services to academic institutions, such as programme development, student acquisition, education technology, and student support services, as well as undertakes contracts to process qualifying tests for individual professions and government departments under multi-year contractual arrangements. It provides its services to governments, educational institutions, corporations, and professional bodies. Pearson plc was founded in 1844 and is headquartered in London, the United Kingdom.

John Wiley & Sons Company Profile

John Wiley & Sons, Inc. provides knowledge and knowledge-enabled services in the areas of research, professional practice and education. The Company operates through three segments: Research, Professional Development and Education. Through the Research segment, the Company provides digital and print scientific, technical, medical and scholarly journals, reference works, books, database services and advertising. The Professional Development segment provides digital and print books, corporate learning solutions, employment talent solutions and training services, and test prep and certification. In the Education segment, the Company provides print and digital content, and education solutions, including online program management services for higher education institutions and course management tools for instructors and students. The Company is engaged in developing and cross-marketing products to its customer base of researchers, professionals, students and educators.

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