Critical Comparison: Strategic Education (NASDAQ:STRA) and Oriental Land (OTCMKTS:OLCLY)

Oriental Land (OTCMKTS:OLCLY) and Strategic Education (NASDAQ:STRA) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Oriental Land and Strategic Education, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oriental Land	0	1	0	0	2.00
Strategic Education	0	3	2	0	2.40

Strategic Education has a consensus price target of $96.67, indicating a potential upside of 19.05%. Given Strategic Education’s stronger consensus rating and higher probable upside, analysts clearly believe Strategic Education is more favorable than Oriental Land.

Profitability

This table compares Oriental Land and Strategic Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oriental Land	18.75%	12.35%	8.57%
Strategic Education	10.46%	8.98%	7.11%

Risk & Volatility

Oriental Land has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Strategic Education has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Valuation and Earnings

This table compares Oriental Land and Strategic Education”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oriental Land	$4.68 billion	7.14	$804.41 million	$0.54	37.76
Strategic Education	$1.27 billion	1.42	$126.61 million	$6.00	13.53

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

Dividends

Oriental Land pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Strategic Education pays an annual dividend of $2.40 per share and has a dividend yield of 3.0%. Oriental Land pays out 11.1% of its earnings in the form of a dividend. Strategic Education pays out 40.0% 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.

Insider & Institutional Ownership

93.3% of Strategic Education shares are held by institutional investors. 3.6% of Strategic Education shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Oriental Land beats Strategic Education on 9 of the 16 factors compared between the two stocks.

About Oriental Land

Oriental Land Co., Ltd. operates and manages theme parks and hotels in Japan. It operates through Theme Park, Hotel Business, and Other Business segments. The Theme Park segment operates and manages Tokyo Disneyland and Tokyo DisneySea theme parks. The Hotel Business segment operates and manages Tokyo Disneyland Hotel, Tokyo DisneySea Hotel MiraCosta, Disney Ambassador Hotel, and Tokyo Disney Celebration Hotel, as well as Tokyo Disney Resort Toy Story Hotel. The Other Business segment operates and manages Ikspiari, a shopping complex that includes shops and restaurants, and a cinema complex; and Disney Resort Line, a monorail connecting four stations within Tokyo Disney Resort. It is also involved in the land development. Oriental Land Co., Ltd. was incorporated in 1960 and is based in Urayasu, Japan.

About Strategic Education

Strategic Education, Inc., through its subsidiaries, provides education services through campus-based and online post-secondary education, and programs to develop job-ready skills. The company operates through U.S. Higher Education, Australia/New Zealand, and Education Technology Services segments. It operates Strayer University that offers undergraduate and graduate degree programs in business, criminal justice, education, health services, information technology, and public administration at physical campuses located in the eastern United States, as well as through online; non-degree web and mobile application development courses through Hackbright Academy and Devmountain; and MBA online through its Jack Welch Management Institute. In addition, the company operates Capella University that provides post-secondary education; Torrens University, which offers undergraduate, graduate, higher degree by research, and specialized degree courses primarily in business, design and creative technology, health, hospitality, and education fields through online and on physical campuses located in Australia; Think Education, a vocational training organization; and Media Design School, which provides industry-endorsed courses in 3D animation and visual effects, game art and programming, graphic and motion design, digital media artificial intelligence, and creative advertising in New Zealand. It also offers Workforce Edge, a platform to employers that provides education benefits administration solutions; and Sophia Learning, which enables lower cost education benefits programs. Strategic Education, Inc. was founded in 1892 and is headquartered in Herndon, Virginia.