Analyzing Graham (GHC) and Its Competitors

Graham (NYSE:GHC) is one of 166 public companies in the “Diversified Consumer Services” industry, but how does it compare to its competitors? We will compare Graham to similar companies based on the strength of its analyst recommendations, earnings, profitability, dividends, institutional ownership, valuation and risk.

Institutional and Insider Ownership

93.2% of Graham shares are owned by institutional investors. Comparatively, 48.4% of shares of all “Diversified Consumer Services” companies are owned by institutional investors. 18.6% of Graham shares are owned by insiders. Comparatively, 19.8% of shares of all “Diversified Consumer Services” companies are owned 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.

Dividends

Graham pays an annual dividend of $7.52 per share and has a dividend yield of 0.6%. Graham pays out 6.6% of its earnings in the form of a dividend. As a group, “Diversified Consumer Services” companies pay a dividend yield of 6.0% and pay out 36.2% of their earnings in the form of a dividend. Graham has increased its dividend for 10 consecutive years.

Valuation & Earnings

This table compares Graham and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Graham	$4.91 billion	$292.29 million	10.25
Graham Competitors	$3.24 billion	$219.82 million	11.47

Graham has higher revenue and earnings than its competitors. Graham is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

Graham has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Graham’s competitors have a beta of 0.49, indicating that their average share price is 51% less volatile than the S&P 500.

Profitability

This table compares Graham and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Graham	9.66%	6.01%	3.50%
Graham Competitors	-3.00%	-28.34%	2.46%

Analyst Recommendations

This is a summary of recent ratings and target prices for Graham and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Graham	0	0	1	1	3.50
Graham Competitors	1433	3427	5279	196	2.41

As a group, “Diversified Consumer Services” companies have a potential upside of 62.59%. Given Graham’s competitors higher possible upside, analysts plainly believe Graham has less favorable growth aspects than its competitors.

Summary

Graham beats its competitors on 10 of the 15 factors compared.

Graham Company Profile

Graham Holdings Company, through its subsidiaries, operates as a diversified education and media company in the United States and internationally. It provides test preparation services and materials; professional training and exam preparation for professional certifications and licensures; and non-academic operations support services to the Purdue University Global; operations support services for online courses and programs; training and test preparation services for accounting and financial services professionals; English-language training, academic preparation programs, and test preparation for English proficiency exams; and A-level examination preparation services, as well as operates colleges, business school, higher education institution, and an online learning institution. The company also owns and operates television stations, restaurants, and entertainment venues; engages in the financial training and automobile dealerships business; offers social media management tools to connect newsrooms with their users; produces Foreign Policy magazine and ForeignPolicy.com website; and publishes Slate, an online magazine, as well as French-language news magazine websites at slate.fr and slateafrique.com. In addition, it provides social media marketing solutions; home health, hospice, and palliative services; burners, igniters, dampers, and controls; screw jacks, linear actuators, and related linear motion products, and lifting systems; pressure impregnated kiln-dried lumber and plywood products; digital advertising services; power charging and data systems, industrial and commercial indoor lighting solutions, and electrical components and assemblies; dermatology and professional aesthetics, and skin care services; software and services; and operates pharmacy. The company was formerly known as The Washington Post Company and changed its name to Graham Holdings Company in November 2013. Graham Holdings Company was founded in 1877 and is based in Arlington, Virginia.