New Oriental Education & Technology Group (NYSE:EDU) and China Online Education Group (COE) Critical Contrast

New Oriental Education & Technology Group (NYSE: EDU) and China Online Education Group (NYSE:COE) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Profitability

This table compares New Oriental Education & Technology Group and China Online Education Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Oriental Education & Technology Group 15.15% 17.32% 10.24%
China Online Education Group -92.66% N/A -71.07%

Institutional and Insider Ownership

77.4% of New Oriental Education & Technology Group shares are held by institutional investors. Comparatively, 27.1% of China Online Education Group shares are held by institutional investors. 15.5% of New Oriental Education & Technology Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares New Oriental Education & Technology Group and China Online Education Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Oriental Education & Technology Group $1.80 billion 7.39 $274.45 million $1.85 45.56
China Online Education Group $60.24 million 3.81 -$74.14 million ($4.13) -2.77

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

Volatility and Risk

New Oriental Education & Technology Group has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, China Online Education Group has a beta of -1.06, meaning that its stock price is 206% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for New Oriental Education & Technology Group and China Online Education Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Oriental Education & Technology Group 2 0 7 0 2.56
China Online Education Group 0 0 0 0 N/A

New Oriental Education & Technology Group currently has a consensus price target of $87.71, indicating a potential upside of 4.07%. Given New Oriental Education & Technology Group’s higher possible upside, equities analysts plainly believe New Oriental Education & Technology Group is more favorable than China Online Education Group.

Summary

New Oriental Education & Technology Group beats China Online Education Group on 12 of the 12 factors compared between the two stocks.

About New Oriental Education & Technology Group

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 China Online Education Group

China Online Education Group is engaged in providing online English language education services to students in the People’s Republic of China (the PRC). The Company operates an online education platform that provides online tutoring programs to students through the Internet. Its platform analyzes teachers’ teaching aptitudes, feedback and rating from students, as well as background, and recommends suitable teachers to students according to their respective characteristics and learning objectives. The Company develops and tailors its curriculum to its interactive lesson format. The Company offers various courses, which include Classic English and Classic English Junior that are focused on the development of English communication skills. The Company also offers various specialty courses that are focused at situation-based English education and test preparation needs, such as Business English and International English Language Testing System (IELTS) Speaking.

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