Head to Head Contrast: Bright Horizons Family Solutions (NYSE:BFAM) and H&R Block (NYSE:HRB)

H&R Block (NYSE:HRB) and Bright Horizons Family Solutions (NYSE:BFAM) are both mid-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, risk, dividends, analyst recommendations and institutional ownership.

Profitability

This table compares H&R Block and Bright Horizons Family Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
H&R Block	18.59%	-214.84%	22.56%
Bright Horizons Family Solutions	-4.38%	23.72%	6.45%

Earnings and Valuation

This table compares H&R Block and Bright Horizons Family Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
H&R Block	$3.95 billion	1.71	$733.60 million	$5.72	9.64
Bright Horizons Family Solutions	$3.07 billion	0.87	$193.12 million	($2.97)	-18.75

H&R Block has higher revenue and earnings than Bright Horizons Family Solutions. Bright Horizons Family Solutions is trading at a lower price-to-earnings ratio than H&R Block, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for H&R Block and Bright Horizons Family Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
H&R Block	1	3	1	0	2.00
Bright Horizons Family Solutions	2	4	4	0	2.20

H&R Block currently has a consensus price target of $46.67, indicating a potential downside of 15.36%. Bright Horizons Family Solutions has a consensus price target of $79.50, indicating a potential upside of 42.72%. Given Bright Horizons Family Solutions’ stronger consensus rating and higher probable upside, analysts plainly believe Bright Horizons Family Solutions is more favorable than H&R Block.

Volatility & Risk

H&R Block has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, Bright Horizons Family Solutions has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Insider & Institutional Ownership

90.1% of H&R Block shares are owned by institutional investors. 0.7% of H&R Block shares are owned by insiders. Comparatively, 1.4% of Bright Horizons Family Solutions shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

H&R Block beats Bright Horizons Family Solutions on 8 of the 14 factors compared between the two stocks.

About H&R Block

H&R Block, Inc. engages in the provision of tax return preparation solutions, financial products and small business solutions. The company was founded by Henry W. Bloch and Richard A. Bloch on January 25, 1955, and is headquartered in Kansas City, MO.

About Bright Horizons Family Solutions

Bright Horizons Family Solutions Inc. provides early education and childcare, back-up care, educational advisory, and other workplace solutions services for employers and families in the United States, Puerto Rico, the United Kingdom, the Netherlands, Australia, and India. The company operates in three segments: Full Service Center-Based Child Care, Back-Up Care, and Educational Advisory and Other Services. The Full Service Center-Based Child Care segment offers traditional center-based child care and early education, preschool, and elementary education services. The Back-Up Care segment provides center-based back-up child care, in-home child and adult/elder dependent care, school-age camps, virtual tutoring, and self-sourced reimbursed care services through child care centers, school-age campuses, and in-home caregivers, as well as the back-up care network. The Educational Advisory and Other Services segment offers tuition assistance and student loan repayment program administration, workforce education, and related educational consulting services, as well as college admissions and college financial advisory services. The company was formerly known as Bright Horizons Solutions Corp. and changed its name to Bright Horizons Family Solutions Inc. in July 2012. Bright Horizons Family Solutions Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.