Frontdoor (NASDAQ:FTDR) and Laureate Education (NASDAQ:LAUR) Critical Review

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

Profitability

This table compares Laureate Education and Frontdoor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Laureate Education	17.57%	23.54%	11.72%
Frontdoor	12.72%	120.90%	14.86%

Valuation & Earnings

This table compares Laureate Education and Frontdoor”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Laureate Education	$1.70 billion	3.10	$281.63 million	$2.23	17.18
Frontdoor	$2.09 billion	2.66	$255.00 million	$3.77	21.45

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

Risk and Volatility

Laureate Education has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500. Comparatively, Frontdoor has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500.

Insider & Institutional Ownership

96.3% of Laureate Education shares are held by institutional investors. 1.5% of Laureate Education shares are held by insiders. Comparatively, 1.6% of Frontdoor shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Laureate Education and Frontdoor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Laureate Education	1	2	3	1	2.57
Frontdoor	0	3	4	0	2.57

Laureate Education presently has a consensus target price of $40.90, indicating a potential upside of 6.76%. Frontdoor has a consensus target price of $95.40, indicating a potential upside of 18.00%. Given Frontdoor’s higher probable upside, analysts clearly believe Frontdoor is more favorable than Laureate Education.

Summary

Frontdoor beats Laureate Education on 9 of the 14 factors compared between the two stocks.

About Laureate Education

Laureate Education, Inc., together with its subsidiaries, offers higher education programs and services to students through a network of universities and higher education institutions. The company provides a range of undergraduate and graduate degree programs in the areas of business and management, medicine and health sciences, and engineering and information technology through campus-based, online, and hybrid programs. It also offers specialized courses for technical and vocational training; and senior high school. Its services are provides in Mexico, Peru, and the United States. The company was formerly known as Sylvan Learning Systems, Inc. and changed its name to Laureate Education, Inc. in May 2004. Laureate Education, Inc. was founded in 1989 and is headquartered in Miami, Florida.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.