China Online Education Group (NYSE: COE) and Universal Technical Institute (NYSE:UTI) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Profitability

This table compares China Online Education Group and Universal Technical Institute’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Online Education Group -80.07% N/A -71.36%
Universal Technical Institute -2.51% -5.65% -2.70%

Risk & Volatility

China Online Education Group has a beta of -1.11, indicating that its stock price is 211% less volatile than the S&P 500. Comparatively, Universal Technical Institute has a beta of 3.47, indicating that its stock price is 247% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for China Online Education Group and Universal Technical Institute, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Online Education Group 0 0 0 0 N/A
Universal Technical Institute 0 1 0 0 2.00

Universal Technical Institute has a consensus price target of $6.00, suggesting a potential upside of 125.56%. Given Universal Technical Institute’s higher possible upside, analysts clearly believe Universal Technical Institute is more favorable than China Online Education Group.

Institutional and Insider Ownership

27.1% of China Online Education Group shares are owned by institutional investors. Comparatively, 57.7% of Universal Technical Institute shares are owned by institutional investors. 28.4% of Universal Technical Institute shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares China Online Education Group and Universal Technical Institute’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Online Education Group $60.24 million 3.66 -$74.14 million ($4.26) -2.58
Universal Technical Institute $324.26 million 0.21 -$8.12 million ($0.53) -5.02

Universal Technical Institute has higher revenue and earnings than China Online Education Group. Universal Technical Institute is trading at a lower price-to-earnings ratio than China Online Education Group, indicating that it is currently the more affordable of the two stocks.

Summary

Universal Technical Institute beats China Online Education Group on 9 of the 11 factors compared between the two stocks.

About China Online Education Group

China Online Education Group is engaged in providing online English language education services to students in the People’s Republic of China (the PRC). The Company operates an online education platform that provides online tutoring programs to students through the Internet. Its platform analyzes teachers’ teaching aptitudes, feedback and rating from students, as well as background, and recommends suitable teachers to students according to their respective characteristics and learning objectives. The Company develops and tailors its curriculum to its interactive lesson format. The Company offers various courses, which include Classic English and Classic English Junior that are focused on the development of English communication skills. The Company also offers various specialty courses that are focused at situation-based English education and test preparation needs, such as Business English and International English Language Testing System (IELTS) Speaking.

About Universal Technical Institute

Universal Technical Institute, Inc. is a provider of postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by total average undergraduate full-time enrollment and graduates. The Company offers undergraduate degree or diploma programs at approximately 12 campuses across the United States under the banner of various brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (collectively, MMI) and NASCAR Technical Institute (NASCAR Tech). The Company also offers manufacturer specific advanced training (MSAT) programs, including student-paid electives, at its campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers. UTI offers automotive, diesel and industrial, and collision repair and refinishing programs.

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