Reviewing Reservoir Media (NASDAQ:RSVR) & Pearson (NYSE:PSO)

Pearson (NYSE:PSO) and Reservoir Media (NASDAQ:RSVR) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Profitability

This table compares Pearson and Reservoir Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pearson	N/A	N/A	N/A
Reservoir Media	5.78%	2.62%	1.11%

Insider and Institutional Ownership

2.1% of Pearson shares are owned by institutional investors. Comparatively, 44.4% of Reservoir Media shares are owned by institutional investors. 0.1% of Pearson shares are owned by company insiders. Comparatively, 27.0% of Reservoir Media shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Pearson and Reservoir Media”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pearson	$4.54 billion	1.99	$554.61 million	N/A	N/A
Reservoir Media	$158.71 million	3.10	$7.75 million	$0.14	53.57

Pearson has higher revenue and earnings than Reservoir Media.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Pearson and Reservoir Media, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pearson	0	2	2	1	2.80
Reservoir Media	0	2	1	0	2.33

Pearson currently has a consensus price target of $18.00, suggesting a potential upside of 26.62%. Reservoir Media has a consensus price target of $11.50, suggesting a potential upside of 53.33%. Given Reservoir Media’s higher possible upside, analysts plainly believe Reservoir Media is more favorable than Pearson.

Risk and Volatility

Pearson has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, Reservoir Media has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Summary

Reservoir Media beats Pearson on 8 of the 13 factors compared between the two stocks.

About Pearson

Pearson plc offers educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally. The company operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills, and Higher Education. The Assessment & Qualifications segment offers Pearson VUE, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications and associated courseware. The Virtual Learning segment provides virtual schools and online program management services. The English Language Learning segment offers Pearson test of English, institutional courseware, and English online solutions. The Workforce Skills offers BTEC, GED, TalentLens, Faethm, Credly, Pearson college, and apprenticeships. The Higher Education segment engages in the US, Canadian, and international higher education courseware businesses. The company was founded in 1844 and is headquartered in London, the United Kingdom.

About Reservoir Media

Reservoir Media, Inc. operates as a music publishing company. It operates through two segments, Music Publishing and Recorded Music. The Music Publishing segment acquires interests in music catalogs, as well as signs songwriters. The Recorded Music segment engages in the acquisition of sound recording catalogs; discovery and development of recording artists; and marketing, distribution, sale, and licensing of the music catalogs. The company was founded in 2007 and is headquartered in New York, New York.