Xueda Education Group (NYSE: XUE) and Capella Education (NASDAQ:CPLA) are both non-cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

91.6% of Capella Education shares are owned by institutional investors. 3.6% of Capella Education shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Xueda Education Group and Capella Education’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xueda Education Group N/A N/A N/A N/A N/A
Capella Education $438.59 million 1.78 $71.59 million $3.87 17.27

Capella Education has higher revenue and earnings than Xueda Education Group.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Xueda Education Group and Capella Education, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xueda Education Group 0 0 0 0 N/A
Capella Education 0 1 2 0 2.67

Capella Education has a consensus target price of $85.36, indicating a potential upside of 27.69%. Given Capella Education’s higher probable upside, analysts plainly believe Capella Education is more favorable than Xueda Education Group.

Dividends

Capella Education pays an annual dividend of $1.64 per share and has a dividend yield of 2.5%. Xueda Education Group does not pay a dividend. Capella Education pays out 42.4% of its earnings in the form of a dividend.

Profitability

This table compares Xueda Education Group and Capella Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xueda Education Group -4.53% -15.97% -4.86%
Capella Education 10.49% 20.23% 15.34%

Summary

Capella Education beats Xueda Education Group on 9 of the 10 factors compared between the two stocks.

About Xueda Education Group

Xueda Education Group is a holding company. The Company, through its subsidiaries and consolidated variable interest entity (VIE), is engaged in providing private personalized tutoring services for primary and secondary school students in the People’s Republic of China (PRC). The Company has developed and implemented a results-oriented, student-centric service delivery model. The Company’s personalized service model consists of six components: assessment, consultation, formulation of a customized study plan, personalized tutoring, delivery of student-oriented supporting services and results. The Company’s learning centers are directly operated by it under its Xueda brand. The Company delivers its services to students through a national network, consisting of approximately 467 learning centers, all of which are operated by it, in 85 cities in China.

About Capella Education

Capella Education Company is an education services company. The Company provides direct path between learning and employment through its online postsecondary education offerings and through programs to develop job-ready skills for demand markets. The company’s segments include post-secondary segment and job-ready skills segment. The post-secondary segment has Capella University (the University) and Sophia Learning, LLC (Sophia). The job-ready skills segment has Capella Learning Solutions, LLC (CLS), Hackbright Academy, Inc. (Hackbright) and DevMountain, LLC (DevMountain). The Company’s program offers six markets, which include public service leadership; nursing and health sciences; social and behavioral sciences; business and technology; education and undergraduate studies. Capella University offers over 1,940 online courses and approximately 50 academic programs with approximately 150 specializations to approximately 38,000 learners.

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