Capella Education (CPLA) vs. RISE Education Cayman (REDU) Critical Analysis

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Capella Education and RISE Education Cayman, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capella Education 0 2 1 0 2.33
RISE Education Cayman 0 0 1 0 3.00

Capella Education currently has a consensus price target of $96.50, indicating a potential upside of 22.38%. RISE Education Cayman has a consensus price target of $15.50, indicating a potential downside of 0.26%. Given Capella Education’s higher probable upside, research analysts clearly believe Capella Education is more favorable than RISE Education Cayman.

Dividends

Capella Education pays an annual dividend of $1.72 per share and has a dividend yield of 2.2%. RISE Education Cayman does not pay a dividend. Capella Education pays out 48.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

91.9% of Capella Education shares are held by institutional investors. 3.6% of Capella Education shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Capella Education 9.60% 19.21% 14.75%
RISE Education Cayman N/A N/A N/A

Valuation and Earnings

This table compares Capella Education and RISE Education Cayman’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Capella Education $429.39 million 2.13 $42.96 million $3.54 22.27
RISE Education Cayman $104.87 million 8.15 $7.95 million N/A N/A

Capella Education has higher revenue and earnings than RISE Education Cayman.

Summary

Capella Education beats RISE Education Cayman on 9 of the 12 factors compared between the two stocks.

Capella Education Company Profile

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.

RISE Education Cayman Company Profile

RISE Education Cayman Ltd is a holding company. The Company, through its subsidiaries, offers after-school English teaching and tutoring services to students aged three to 18. It operates in China’s junior English Language Training (ELT) market. Its offers three flagship courses, including Rise Start, Rise On and Rise Up, that are designed for students aged three to six, seven to twelve and 13 to 18, respectively. As of June 30, 2017, the Company had a network of 246 learning centers across 80 cities in China, among which 56 were self-owned centers and 190 centers were franchised learning centers. Its suite of products comprises both online and offline coursework. Its also offers a series of complementary products to students from both self-owned learning centers and franchised learning centers, including online products Can-Talk and Rise Library Online, and offline products Rise Camp, Rise Workshop and Rise Overseas Study Tour.

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