Reviewing RYB Education (RYB) and RISE Education Cayman (REDU)

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RYB Education (NASDAQ: REDU) and RISE Education Cayman (NASDAQ:REDU) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for RYB Education and RISE Education Cayman, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RYB Education 0 2 1 0 2.33
RISE Education Cayman 0 0 3 0 3.00

RYB Education presently has a consensus target price of $27.00, suggesting a potential upside of 39.32%. RISE Education Cayman has a consensus target price of $15.50, suggesting a potential upside of 50.63%. Given RISE Education Cayman’s stronger consensus rating and higher possible upside, analysts plainly believe RISE Education Cayman is more favorable than RYB Education.

Insider & Institutional Ownership

8.2% of RYB Education shares are owned by institutional investors. Comparatively, 12.4% of RISE Education Cayman shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares RYB Education and RISE Education Cayman’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RYB Education N/A N/A N/A
RISE Education Cayman -2.68% 20.71% 2.38%

Earnings and Valuation

This table compares RYB Education and RISE Education Cayman’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RYB Education $140.80 million 3.94 $7.11 million $0.27 71.78
RISE Education Cayman $148.98 million 3.80 -$7.37 million $0.10 102.90

RYB Education has higher earnings, but lower revenue than RISE Education Cayman. RYB Education is trading at a lower price-to-earnings ratio than RISE Education Cayman, indicating that it is currently the more affordable of the two stocks.

Summary

RISE Education Cayman beats RYB Education on 8 of the 12 factors compared between the two stocks.

About RYB Education

RYB Education, Inc. provides early childhood education service in the People's Republic of China. The company offers kindergarten services to 2-6-year-old children; and play-and-learn centers services for the joint participation of 0-6-year-old children and their families to promote children's development and prepare them for their entry into kindergartens and primary schools. It also develops and sells educational products and services, such as teaching aids, educational toys, at-home educational products, and school uniforms through franchisees and alliance participants, as well as directly to a market of families. As of December 31, 2017, it operated 85 directly operated and 210 franchise kindergartens; and 953 play-and-learn centers. The company was formerly known as Top Margin Limited and changed its name to RYB Education, Inc. in June 2017. RYB Education, Inc. was founded in 1998 and is based in Beijing, China.

About RISE Education Cayman

RISE Education Cayman Ltd, through its subsidiaries, provides junior English language training services under the RISE brand name in the People's Republic of China. The company offers a range of educational programs, services, and products, including educational courses, sale of course materials, franchise services, and study tours. It also provides educational consulting services. As of December 31, 2017, the company had a network of 270 learning centers comprising 64 self-owned centers and 206 franchised learning centers across 85 cities in the People's Republic of China. RISE Education Cayman Ltd was founded in 2007 and is headquartered in Beijing, the People's Republic of China.

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