TAL Education Group (NYSE:TAL) & ITT Educational Services (OTCMKTS:ESINQ) Critical Review

TAL Education Group (NYSE:TAL) and ITT Educational Services (OTCMKTS:ESINQ) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for TAL Education Group and ITT Educational Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TAL Education Group	0	2	1	1	2.75
ITT Educational Services	0	0	0	0	0.00

TAL Education Group presently has a consensus target price of $14.80, suggesting a potential upside of 27.77%. Given TAL Education Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe TAL Education Group is more favorable than ITT Educational Services.

Insider & Institutional Ownership

37.8% of TAL Education Group shares are held by institutional investors. Comparatively, 62.7% of ITT Educational Services shares are held by institutional investors. 1.8% of TAL Education Group shares are held by insiders. Comparatively, 3.8% of ITT Educational Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares TAL Education Group and ITT Educational Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TAL Education Group	$3.01 billion	2.13	$530.75 million	$1.61	7.19
ITT Educational Services	N/A	N/A	N/A	N/A	N/A

TAL Education Group has higher revenue and earnings than ITT Educational Services.

Profitability

This table compares TAL Education Group and ITT Educational Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TAL Education Group	28.43%	24.55%	15.08%
ITT Educational Services	N/A	N/A	N/A

Summary

TAL Education Group beats ITT Educational Services on 8 of the 10 factors compared between the two stocks.

About TAL Education Group

TAL Education Group provides K-12 after-school tutoring services in the People’s Republic of China. It provides learning services primarily through small-classes services; personalized premium services; and learning content solutions, such as print books, smart books, mobile apps, and AI-driven learning devices. The company also operates www.xueersi.com, an online education platform; provides investment management and consulting services; develops and sells software and networks, as well as related consulting services; and sells educational materials and products. It offers its services under the Haoweilai and Think Academy brands. TAL Education Group was founded in 2003 and is headquartered in Beijing, the People’s Republic of China.

About ITT Educational Services

ITT Educational Services, Inc. provides postsecondary degree programs in the United States. It offers master, bachelor, and associate degree programs to approximately 45,000 students; and short-term information technology and business learning solutions for career advancers and other professionals. The company's business education programs include accounting, business administration, financial services, manufacturing, marketing and advertising, and sales; and drafting and design programs consist of architectural and construction drafting, civil drafting, computer aided drafting, electrical and electronics drafting, industrial engineering technology, interior design, landscape architecture, mechanical drafting, and multimedia communications. Its electronics technology programs include communications, computer technology, electronics product design and fabrication, industrial electronics, instrumentation, and telecommunications; and criminal justice programs include corrections, cyber security, investigations, and security and policing. The company's IT programs include communications, network administration, network technology, software development, systems technology, and technical support; and Breckinridge school of nursing and health sciences programs comprise health information technology, medical assisting and administration, and nursing. As of December 31, 2015, it had 138 college locations in 39 states. The company was founded in 1946 and is headquartered in Carmel, Indiana. On September 16, 2016, ITT Educational Services Inc. along with its affiliates filed a voluntary petition for liquidation under Chapter 7 in the U.S. Bankruptcy Court for the Southern District of Indiana.