Makita (OTCMKTS:MKTAY) and Perdoceo Education (NASDAQ:PRDO) Critical Review

Makita (OTCMKTS:MKTAY) and Perdoceo Education (NASDAQ:PRDO) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Dividends

Makita pays an annual dividend of $1.18 per share and has a dividend yield of 3.5%. Perdoceo Education pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. Makita pays out 57.6% of its earnings in the form of a dividend. Perdoceo Education pays out 24.8% 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. Perdoceo Education has increased its dividend for 1 consecutive years.

Profitability

This table compares Makita and Perdoceo Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Makita	10.40%	8.23%	6.98%
Perdoceo Education	20.62%	18.93%	14.66%

Analyst Ratings

This is a summary of current recommendations and price targets for Makita and Perdoceo Education, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Makita	1	0	0	0	1.00
Perdoceo Education	0	1	2	0	2.67

Perdoceo Education has a consensus target price of $44.00, suggesting a potential upside of 31.78%. Given Perdoceo Education’s stronger consensus rating and higher probable upside, analysts plainly believe Perdoceo Education is more favorable than Makita.

Valuation and Earnings

This table compares Makita and Perdoceo Education”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Makita	$5.17 billion	1.71	$524.13 million	$2.05	16.28
Perdoceo Education	$858.61 million	2.43	$159.91 million	$2.74	12.19

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

Institutional and Insider Ownership

93.5% of Perdoceo Education shares are owned by institutional investors. 1.0% of Makita shares are owned by company insiders. Comparatively, 1.5% of Perdoceo Education shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Makita has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500. Comparatively, Perdoceo Education has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Summary

Perdoceo Education beats Makita on 13 of the 17 factors compared between the two stocks.

About Makita

Makita Corporation engages in the manufacture and sale of electric power tools, pneumatic tools, and gardening and household equipment in Japan, Europe, North America, Asia, Australia, Brazil, and the United Arab Emirates. It offers cordless, drilling/fastening, impact drilling/demolition, grinding/sanding, sawing, planning/routering, pneumatic, outdoor power, and dust extraction/other equipment, as well as accessories; and cutting equipment for new materials, masonry, and metals. The company was formerly known as Makita Electric Works, Ltd. and changed its name to Makita Corporation in April 1991. Makita Corporation was founded in 1915 and is headquartered in Anjo, Japan.

About Perdoceo Education

Perdoceo Education Corporation provides postsecondary education through online, campus-based, and blended learning programs in the United States. It operates in two segments, Colorado Technical University and The American InterContinental University System. The Colorado Technical University segment offers academic programs, such as business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity, and criminal justice. The American InterContinental University System segment provides academic programs, including business studies, information technologies, education, and health sciences. The company also offers non-degree and professional development programs. In addition, it operates intellipath, a learning platform used to educate students; and a mobile application and two-way messaging platform. The company was formerly known as Career Education Corporation and changed its name to Perdoceo Education Corporation in January 2020. Perdoceo Education Corporation was incorporated in 1994 and is headquartered in Schaumburg, Illinois.