Pearson vs 2U Which Is More Profitable?

Pearson and 2U are two prominent players in the education technology sector, each offering unique solutions for online learning. Pearson, a traditional publishing company, has diversified its business to focus more on digital education offerings to adapt to the changing landscape. On the other hand, 2U provides a platform for universities to offer online degree programs. Both companies have seen fluctuations in their stock performance, with investors closely monitoring their ability to innovate and meet the demands of the competitive market.

Pearson or 2U?

When comparing Pearson and 2U, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Pearson and 2U.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Pearson has a dividend yield of 1.87%, while 2U has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Pearson reports a 5-year dividend growth of 2.35% year and a payout ratio of 40.22%. On the other hand, 2U reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Pearson P/E ratio at 19.04 and 2U's P/E ratio at -0.01. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Pearson P/B ratio is 2.23 while 2U's P/B ratio is -0.02.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Pearson has seen a 5-year revenue growth of -0.03%, while 2U's is 0.59%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Pearson's ROE at 11.45% and 2U's ROE at -650.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $15.59 for Pearson and $1.53 for 2U. Over the past year, Pearson's prices ranged from $11.69 to $16.01, with a yearly change of 36.95%. 2U's prices fluctuated between $1.05 and $128.10, with a yearly change of 12100.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.