Educational Development (NASDAQ:EDUC – Get Free Report) and Townsquare Media (NYSE:TSQ – Get Free Report) are both small-cap communication services companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.
Profitability
This table compares Educational Development and Townsquare Media’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Educational Development | 9.75% | -18.23% | -12.73% |
| Townsquare Media | -11.82% | -5.59% | 0.51% |
Insider and Institutional Ownership
19.6% of Educational Development shares are held by institutional investors. Comparatively, 71.7% of Townsquare Media shares are held by institutional investors. 11.9% of Educational Development shares are held by insiders. Comparatively, 30.3% of Townsquare Media shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Educational Development | 1 | 0 | 0 | 0 | 1.00 |
| Townsquare Media | 1 | 1 | 1 | 0 | 2.00 |
Townsquare Media has a consensus price target of $10.00, indicating a potential upside of 77.30%. Given Townsquare Media’s stronger consensus rating and higher possible upside, analysts clearly believe Townsquare Media is more favorable than Educational Development.
Valuation and Earnings
This table compares Educational Development and Townsquare Media”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Educational Development | $22.91 million | 0.50 | $2.33 million | $0.23 | 5.87 |
| Townsquare Media | $427.38 million | 0.24 | -$9.75 million | ($2.88) | -1.96 |
Educational Development has higher earnings, but lower revenue than Townsquare Media. Townsquare Media is trading at a lower price-to-earnings ratio than Educational Development, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Educational Development has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Townsquare Media has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.
Summary
Townsquare Media beats Educational Development on 9 of the 14 factors compared between the two stocks.
About Educational Development
Educational Development Corporation, a publishing company, operates as a publisher of educational children's books in the United States. It operates through two segments, PaperPie and Publishing. The company offers various books, including touchy-feely board books, activity books and flashcards, adventure and search books, art books, sticker books, and foreign language books, as well as internet-linked books comprising science and math titles, and chapter books and novels. It markets its products to retail accounts, which include book, school supply, toy and gift stores and museums, through commissioned sales representatives, trade and specialty wholesalers, and its internal tele-sales group; and through a network of independent sales consultants through internet sales, direct sales, home shows, and book fairs. Educational Development Corporation was incorporated in 1965 and is headquartered in Tulsa, Oklahoma.
About Townsquare Media
Townsquare Media, Inc. operates as a digital media and marketing solutions company in small and medium-sized businesses. It operates through three segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising. The Subscription Digital Marketing Solutions segment offers website design, creation, and development, as well as hosting services; and search engine optimization, online directory optimization, e-commerce solutions, online reputation monitoring, social media management, appointment scheduling, payment and invoice, customer management, and email and SMS marketing services. The Digital Advertising segment provides digital advertising on its owned and operated, digital programmatic advertising, and data analytics and management platform. The Broadcast Advertising segment engages in the sale of advertising on local radio stations to local, regional, and national spot advertisers, as well as national network advertisers. It also owns and operates live events, including concerts, expositions, and other experiential events; and operates local media under the WYRK.com, WJON.com, and NJ101.5.com brands, as well as national music under the XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com brands. The company was formerly known as Regent Communications, Inc. and changed its name to Townsquare Media, Inc. in May 2010. Townsquare Media, Inc. is headquartered in Purchase, New York.
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