Analyzing H&R Block (NYSE:HRB) & Sunlands Technology Group (NYSE:STG)

Sunlands Technology Group (NYSE:STG) and H&R Block (NYSE:HRB) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sunlands Technology Group and H&R Block, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunlands Technology Group	1	0	0	0	1.00
H&R Block	1	3	1	0	2.00

H&R Block has a consensus price target of $46.67, indicating a potential upside of 3.48%. Given H&R Block’s stronger consensus rating and higher probable upside, analysts clearly believe H&R Block is more favorable than Sunlands Technology Group.

Volatility & Risk

Sunlands Technology Group has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, H&R Block has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500.

Institutional & Insider Ownership

26.4% of Sunlands Technology Group shares are owned by institutional investors. Comparatively, 90.1% of H&R Block shares are owned by institutional investors. 59.7% of Sunlands Technology Group shares are owned by insiders. Comparatively, 1.4% of H&R Block shares are owned by 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 and Valuation

This table compares Sunlands Technology Group and H&R Block”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunlands Technology Group	$1.84 billion	0.02	$52.28 million	$3.48	0.85
H&R Block	$3.95 billion	1.45	$733.60 million	$5.72	7.88

H&R Block has higher revenue and earnings than Sunlands Technology Group. Sunlands Technology Group is trading at a lower price-to-earnings ratio than H&R Block, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sunlands Technology Group and H&R Block’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunlands Technology Group	17.60%	32.84%	15.90%
H&R Block	18.59%	-214.84%	22.56%

Dividends

Sunlands Technology Group pays an annual dividend of $0.63 per share and has a dividend yield of 21.3%. H&R Block pays an annual dividend of $1.84 per share and has a dividend yield of 4.1%. Sunlands Technology Group pays out 18.1% of its earnings in the form of a dividend. H&R Block pays out 32.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. H&R Block has increased its dividend for 9 consecutive years. Sunlands Technology Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

H&R Block beats Sunlands Technology Group on 12 of the 17 factors compared between the two stocks.

About Sunlands Technology Group

Sunlands Technology Group, through its subsidiaries, provides online education services through online and mobile platforms in the People's Republic of China. It offers various degree- and diploma-oriented post-secondary courses, including preparation courses for the self-taught higher education examination (STE) for learners pursuing associate diplomas or bachelor's degrees, as well as for the entrance examinations of Master of Business Administration programs. The company's STE courses include Chinese language and literature, law, pre-school education, marketing, English, human resource management, business administration, business management, modern corporate governance, financial management, advertising, accounting, administrative management, computer information management, finance, chain operation management, and visual communication and design and production. It also provides professional certification preparation courses in various industries and professions, such as accounting, human resources, teaching, and finance. In addition, the company offers education services through online and mobile platforms to adult students, pursuing post-secondary, and professional educations. The company was formerly known as Sunlands Online Education Group and changed its name to Sunlands Technology Group in August 2018. Sunlands Technology Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.

About H&R Block

H&R Block, Inc. engages in the provision of tax return preparation solutions, financial products and small business solutions. The company was founded by Henry W. Bloch and Richard A. Bloch on January 25, 1955, and is headquartered in Kansas City, MO.