Analyzing Aspen Group (ASPU) & Houghton Mifflin Harcourt (HMHC)

Aspen Group (NASDAQ: ASPU) and Houghton Mifflin Harcourt (NASDAQ:HMHC) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Profitability

This table compares Aspen Group and Houghton Mifflin Harcourt’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aspen Group -8.69% -29.44% -14.10%
Houghton Mifflin Harcourt -18.59% -17.37% -5.20%

Valuation and Earnings

This table compares Aspen Group and Houghton Mifflin Harcourt’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Aspen Group $14.25 million 8.46 -$1.10 million ($0.13) -68.23
Houghton Mifflin Harcourt $1.37 billion 0.80 -$284.55 million ($2.11) -4.22

Aspen Group has higher revenue, but lower earnings than Houghton Mifflin Harcourt. Aspen Group is trading at a lower price-to-earnings ratio than Houghton Mifflin Harcourt, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

1.8% of Aspen Group shares are held by institutional investors. Comparatively, 98.3% of Houghton Mifflin Harcourt shares are held by institutional investors. 15.3% of Aspen Group shares are held by insiders. Comparatively, 1.3% of Houghton Mifflin Harcourt 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.

Analyst Recommendations

This is a summary of current ratings for Aspen Group and Houghton Mifflin Harcourt, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aspen Group 0 0 2 0 3.00
Houghton Mifflin Harcourt 0 4 1 0 2.20

Aspen Group currently has a consensus target price of $10.00, indicating a potential upside of 12.74%. Houghton Mifflin Harcourt has a consensus target price of $13.10, indicating a potential upside of 47.19%. Given Houghton Mifflin Harcourt’s higher probable upside, analysts clearly believe Houghton Mifflin Harcourt is more favorable than Aspen Group.

Risk and Volatility

Aspen Group has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Houghton Mifflin Harcourt has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Summary

Aspen Group beats Houghton Mifflin Harcourt on 8 of the 13 factors compared between the two stocks.

Aspen Group Company Profile

Aspen Group, Inc. is a holding company. The Company’s subsidiary, Aspen University Inc. (Aspen), is dedicated to provide the education experiences taught by professors. Aspen offers approximately two monthly payment programs, a monthly payment plan in which students make payments every month over a fixed period (36, 39 or 72 months depending on the degree program) and a monthly installment plan in which students pay over three monthly installments (day 1, day 31 and day 61 after the start of each course). As of June 30, 2016, Aspen had 2,074 students paying tuition through either of the monthly payment methods. It offers certificate programs and associate, bachelor’s, master’s and doctoral degree programs in a range of areas, including nursing, business, education and professional studies. It offers a range of nursing degrees, including Master of Science in Nursing, Master of Science in Nursing-Nursing Education and Master of Science in Nursing-Nursing Administration and Management.

Houghton Mifflin Harcourt Company Profile

Houghton Mifflin Harcourt Company (HMH) is a global learning company, specializing in education solutions across a range of media. The Company operates through two segments: Education and Trade Publishing. As of December 31, 2016, the Company delivered content, services and technology to both educational institutions and consumers, reaching over 50 million students in approximately 150 countries across the world. It sells its products and services across multiple media and distribution channels. Its Education segment provides educational content, services and technology solutions to meet the diverse needs of classrooms. Its Trade Publishing segment develops, markets and sells consumer books in print and digital formats, and licenses book rights to other publishers and electronic businesses in the United States and abroad.

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