Critical Analysis: China Distance Education (DL) versus Aspen Group (NASDAQ:ASPU)

China Distance Education (NYSE: DL) and Aspen Group (NASDAQ:ASPU) are both small-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, valuation, dividends and earnings.

Profitability

This table compares China Distance Education and Aspen Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Distance Education 11.40% 26.00% 7.91%
Aspen Group -11.48% -32.02% -16.04%

Institutional & Insider Ownership

19.5% of China Distance Education shares are owned by institutional investors. Comparatively, 5.9% of Aspen Group shares are owned by institutional investors. 15.3% of Aspen Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

China Distance Education has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, Aspen Group has a beta of -0.17, suggesting that its share price is 117% less volatile than the S&P 500.

Earnings & Valuation

This table compares China Distance Education and Aspen Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Distance Education $130.99 million 2.34 $14.94 million $0.45 20.64
Aspen Group $14.25 million 9.12 -$1.10 million ($0.15) -58.47

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

Analyst Ratings

This is a breakdown of recent ratings for China Distance Education and Aspen Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Distance Education 1 0 0 0 1.00
Aspen Group 0 1 1 0 2.50

Aspen Group has a consensus price target of $12.25, indicating a potential upside of 39.68%. Given Aspen Group’s stronger consensus rating and higher probable upside, analysts plainly believe Aspen Group is more favorable than China Distance Education.

Summary

China Distance Education beats Aspen Group on 9 of the 14 factors compared between the two stocks.

About China Distance Education

China Distance Education Holdings Limited is a holding company. The Company is engaged in providing online and offline education services, and selling related products in the People’s Republic of China (PRC). The Company’s segments include online education services, business start-up training services and the sale of learning simulation software. The Company primarily sells books and reference materials related to its courses, such as the various levels of Accounting Professional Qualification Examinations, accounting continuing education, the National Practicing Medical Doctor Qualification Examination, the National Pharmacist Qualification Examination, and Associate Constructor and Constructor Qualification Examinations. It offers college oriented online-to-offline products and services, business start-up training courses and others. The Company had a content library with 263 course offerings of audio-video content, as of September 30, 2016.

About Aspen Group

Aspen Group, Inc. is a holding company. The Company’s subsidiary, Aspen University Inc. (Aspen), is dedicated to provide the education experiences taught by professors. Aspen offers approximately two monthly payment programs, a monthly payment plan in which students make payments every month over a fixed period (36, 39 or 72 months depending on the degree program) and a monthly installment plan in which students pay over three monthly installments (day 1, day 31 and day 61 after the start of each course). As of June 30, 2016, Aspen had 2,074 students paying tuition through either of the monthly payment methods. It offers certificate programs and associate, bachelor’s, master’s and doctoral degree programs in a range of areas, including nursing, business, education and professional studies. It offers a range of nursing degrees, including Master of Science in Nursing, Master of Science in Nursing-Nursing Education and Master of Science in Nursing-Nursing Administration and Management.

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