Critical Comparison: McGraw Hill (NYSE:MH) vs. Youdao (NYSE:DAO)

Youdao (NYSE:DAO) and McGraw Hill (NYSE:MH) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, valuation, analyst recommendations, profitability and earnings.

Valuation and Earnings

This table compares Youdao and McGraw Hill”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Youdao	$822.04 million	2.66	$15.35 million	$0.20	90.60
McGraw Hill	$2.12 billion	1.26	$35.32 million	$0.50	27.84

McGraw Hill has higher revenue and earnings than Youdao. McGraw Hill is trading at a lower price-to-earnings ratio than Youdao, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Youdao has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, McGraw Hill has a beta of -0.83, indicating that its share price is 183% less volatile than the S&P 500.

Institutional and Insider Ownership

21.9% of Youdao shares are owned by institutional investors. 43.0% of Youdao shares are owned by insiders. Comparatively, 1.2% of McGraw Hill shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Youdao and McGraw Hill’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Youdao	2.71%	-8.46%	8.78%
McGraw Hill	4.38%	62.57%	8.56%

Analyst Recommendations

This is a summary of recent recommendations for Youdao and McGraw Hill, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Youdao	0	1	1	0	2.50
McGraw Hill	1	2	8	1	2.75

Youdao currently has a consensus price target of $22.00, indicating a potential upside of 21.41%. McGraw Hill has a consensus price target of $17.20, indicating a potential upside of 23.56%. Given McGraw Hill’s stronger consensus rating and higher possible upside, analysts clearly believe McGraw Hill is more favorable than Youdao.

Summary

McGraw Hill beats Youdao on 9 of the 15 factors compared between the two stocks.

About Youdao

Youdao, Inc., an internet technology company, provides online services in the field of content, community, communication, and commerce in China. It operates through three segments: Learning Services, Smart Devices, and Online Marketing Services. The company provides various learning content, applications, and solutions, which cover topics and target people from various age groups for their learning needs through its websites and mobile applications. It offers online knowledge tools, which include Youdao and other dictionaries and translation tools; learning services consisting of tutoring, fee-based premium, and other services; STEAM courses, adult and vocational courses, and other courses, such as China University MOOC; smart devices, such as Youdao Dictionary Pen, Youdao Listening Pod, Youdao Smart light, Youdao Pocket Translator, and Youdao Super Dictionary; education digitalization solutions comprising technologies and solutions licensed to schools or enterprise customers, such as Youdao Smart Learning Terminal, Youdao Sports, and Youdao Smart Cloud; and online marketing services. In addition, the company provides online courses comprising Youdao Premium Courses and NetEase Cloud Classroom, as well as technical support to the variable interest entities (VIEs). Youdao, Inc. was founded in 2006 and is headquartered in Hangzhou, China. Youdao, Inc. is a subsidiary of NetEase, Inc.

About McGraw Hill

At McGraw Hill, our purpose is to unlock the potential of each learner at every stage of life. Our mission is to support educators, learners and professionals around the world with trusted, high-quality content and digital solutions that use data and learning science to adapt to each student as they progress towards their goals. McGraw Hill is a leading global provider of information solutions for education across K-12 to higher education, and through professional learning. We harness the power of content, data-driven insights, and learning science to deliver personalized learning experiences and drive positive outcomes throughout the entire learning lifecycle. We believe that we have positively impacted hundreds of millions of learners and educators with our personalized learning solutions to support learning at scale worldwide. On an annual basis, we serve approximately 60 million learners and educators. We believe McGraw Hill is one of the most trusted and recognized education brands in the world. Based on the results of a third-party survey that we commissioned in the fiscal year ended March 31, 2025, we believe that, in the United States, on average, 89% of K-12, higher education and medical school students, faculty and administrators would consider McGraw Hill for their classes. Understanding how learning happens is critical to building effective learning solutions, like ALEKS, which has leveraged data science and machine learning to enhance learning outcomes for over 25 years. Over the last decade, we have invested more than $2.0 billion in developing a suite of market leading digital learning solutions. We utilize our data analytics capabilities to generate continuous feedback loops that drive product and go-to-market innovation, which allows us to simplify workflows while creating meaningful learning experiences that are tailored to the needs of each learner. At McGraw Hill, we recognize that the integrity of educational content is of utmost importance, especially as generative AI becomes more integrated into the learning process. With the proliferation of AI-generated generic content, the risks of inaccurate and low-quality information are heightened, which is why our proprietary content is rigorously researched and designed to meet the highest quality standards. We aim to offer vetted content and data-driven learning solutions that educators and learners can trust. With approximately 1,500 sales professionals worldwide as of March 31, 2025, we believe our global sales force is one of the largest in the education sector, underpinning our ability to serve learners, educators and professionals at scale across the learning lifecycle. Our principal offices are located in Columbus, Ohio.