Thomson Reuters (NYSE: TRI) and Cambium Learning Group (NASDAQ:ABCD) are both business services companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.
Earnings and Valuation
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This table compares Thomson Reuters and Cambium Learning Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Thomson Reuters||$11.33 billion||2.53||$1.40 billion||$2.51||16.06|
|Cambium Learning Group||$158.18 million||3.32||$45.05 million||$0.43||25.93|
Thomson Reuters has higher revenue and earnings than Cambium Learning Group. Thomson Reuters is trading at a lower price-to-earnings ratio than Cambium Learning Group, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Thomson Reuters has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Cambium Learning Group has a beta of -0.93, suggesting that its share price is 193% less volatile than the S&P 500.
This table compares Thomson Reuters and Cambium Learning Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cambium Learning Group||28.42%||-48.67%||10.20%|
This is a breakdown of current recommendations and price targets for Thomson Reuters and Cambium Learning Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cambium Learning Group||0||0||1||0||3.00|
Thomson Reuters presently has a consensus target price of $46.69, indicating a potential upside of 15.80%. Cambium Learning Group has a consensus target price of $12.50, indicating a potential upside of 12.11%. Given Thomson Reuters’ higher probable upside, analysts plainly believe Thomson Reuters is more favorable than Cambium Learning Group.
Thomson Reuters pays an annual dividend of $1.38 per share and has a dividend yield of 3.4%. Cambium Learning Group does not pay a dividend. Thomson Reuters pays out 55.0% of its earnings in the form of a dividend. Thomson Reuters has raised its dividend for 10 consecutive years.
Institutional & Insider Ownership
24.6% of Thomson Reuters shares are held by institutional investors. Comparatively, 17.4% of Cambium Learning Group shares are held by institutional investors. 72.2% of Cambium Learning Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Thomson Reuters beats Cambium Learning Group on 10 of the 17 factors compared between the two stocks.
About Thomson Reuters
Thomson Reuters Corporation provides news and information for professional markets worldwide. The company operates through three segments: Financial & Risk, Legal, and Tax & Accounting. It sells electronic content and services to professionals primarily on a subscription basis. The Financial & Risk segment offers critical news, information, and analytics enabling transactions and connecting communities of trading, investment, financial, and corporate professionals. This segment also provides regulatory and operational risk management solutions. The Legal segment offers critical online and print information, decision tools, and software and services to support legal, investigation, business, and government professionals. The Tax & Accounting segment provides integrated tax compliance and accounting information, software, and services for professionals in accounting firms, corporations, law firms, and government. Thomson Reuters Corporation also operates Reuters, which provides real-time multimedia news and information services to newspapers, television and cable networks, radio stations, and Websites. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. Thomson Reuters Corporation was founded in 1799 and is based in Toronto, Canada.
About Cambium Learning Group
Cambium Learning Group, Inc. provides educational technology solutions in the United States and internationally. It operates in three segments: Learning A-Z, ExploreLearning, and Voyager Sopris Learning. The Learning A-Z segment offers PreK-6 technology-enabled learning resources. It operates subscription-based Websites, including Reading A-Z, Raz-Kids, Headsprout, Science A-Z, Writing A-Z, Vocabulary A-Z, and ReadyTest A-Z that provide online supplemental books, lessons, assessments, and other instructional resources for individual classrooms, schools, and districts. The ExploreLearning segment offers Gizmos, a library of interactive online simulations for math and science education in grades 3-12; and Reflex, an adaptive online solution for math fact fluency development for grades 2-8. The Voyager Sopris Learning provides technology, materials, and professional development for educators to ensure students graduate prepared for college, career, and satisfaction in life after K-12. This segment offers LANGUAGE! Live, a literacy solution; Language Essentials for Teachers of Reading and Spelling (LETRS), a professional development solution; Step Up to Writing, a writing program; TransMath, a skill-based mathematics intervention program; Vmath, a targeted math intervention program; Velocity, a K-5 supplemental literacy intervention solution; and Kurzweil 3000, a reading, writing, and learning software. It also provides DIBELS Next, a K-6 reading screener; Read Well, a K-3 literacy program; REWARDS, a 3-12 supplemental program; TimeWarp Plus, a K-8 extended-day and/or summer school program; and LANGUAGE! The Comprehensive Literacy Curriculum, an intervention for students in grades 4-12. The company serves private and charter schools, teachers, home school and parent consumers, and other companies through its sales force, as well as e-commerce and Internet. Cambium Learning Group, Inc. was incorporated in 2009 and is headquartered in Dallas, Texas.