Reviewing KinderCare Learning Companies (NYSE:KLC) & Graham (NYSE:GHC)

Graham (NYSE:GHC) and KinderCare Learning Companies (NYSE:KLC) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Graham and KinderCare Learning Companies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Graham	0	0	2	0	3.00
KinderCare Learning Companies	3	6	1	0	1.80

KinderCare Learning Companies has a consensus target price of $4.80, suggesting a potential downside of 0.54%. Given KinderCare Learning Companies’ higher probable upside, analysts plainly believe KinderCare Learning Companies is more favorable than Graham.

Profitability

This table compares Graham and KinderCare Learning Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Graham	5.97%	5.40%	3.11%
KinderCare Learning Companies	-15.48%	8.22%	1.70%

Valuation and Earnings

This table compares Graham and KinderCare Learning Companies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Graham	$4.98 billion	1.02	$292.29 million	$67.57	17.49
KinderCare Learning Companies	$2.73 billion	0.21	-$112.88 million	($3.58)	-1.35

Graham has higher revenue and earnings than KinderCare Learning Companies. KinderCare Learning Companies is trading at a lower price-to-earnings ratio than Graham, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

93.2% of Graham shares are held by institutional investors. 18.6% of Graham shares are held by insiders. Comparatively, 5.3% of KinderCare Learning Companies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Graham has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, KinderCare Learning Companies has a beta of 4.2, meaning that its share price is 320% more volatile than the S&P 500.

Summary

Graham beats KinderCare Learning Companies on 11 of the 14 factors compared between the two stocks.

About Graham

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.

About KinderCare Learning Companies

KinderCare Learning Companies Inc. is a provider of high-quality early childhood education by center capacity. KinderCare Learning Companies Inc. is based in PORTLAND, Ore.