Head to Head Review: Bright Horizons Family Solutions (NYSE:BFAM) and Laureate Education (NASDAQ:LAUR)

Laureate Education (NASDAQ:LAUR) and Bright Horizons Family Solutions (NYSE:BFAM) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Institutional and Insider Ownership

96.3% of Laureate Education shares are held by institutional investors. 1.5% of Laureate Education shares are held by company insiders. Comparatively, 1.4% of Bright Horizons Family Solutions shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Laureate Education and Bright Horizons Family Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Laureate Education	1	2	3	1	2.57
Bright Horizons Family Solutions	2	4	4	0	2.20

Laureate Education currently has a consensus target price of $40.90, indicating a potential upside of 16.99%. Bright Horizons Family Solutions has a consensus target price of $79.50, indicating a potential upside of 53.73%. Given Bright Horizons Family Solutions’ higher probable upside, analysts plainly believe Bright Horizons Family Solutions is more favorable than Laureate Education.

Profitability

This table compares Laureate Education and Bright Horizons Family Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Laureate Education	20.28%	26.41%	12.76%
Bright Horizons Family Solutions	-4.38%	23.72%	6.45%

Valuation and Earnings

This table compares Laureate Education and Bright Horizons Family Solutions”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Laureate Education	$1.70 billion	2.79	$281.63 million	$2.73	12.81
Bright Horizons Family Solutions	$3.07 billion	0.81	$193.12 million	($2.97)	-17.41

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

Risk and Volatility

Laureate Education has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500. Comparatively, Bright Horizons Family Solutions has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Summary

Laureate Education beats Bright Horizons Family Solutions on 11 of the 15 factors compared between the two stocks.

About Laureate Education

Laureate Education, Inc. operates a network of private higher education institutions in Mexico and Peru. Its principal institutions are Universidad del Valle de México (UVM) and Universidad Peruana de Ciencias Aplicadas (UPC). The company offers undergraduate and graduate degree programs, as well as other academic and professional education, across fields that include business, health sciences, engineering and technology. Its institutions serve students through campus-based and digital learning options.

About Bright Horizons Family Solutions

Bright Horizons Family Solutions provides early education and child care, back-up care, and other services that help employers support employees’ family and education needs. Its offerings include center-based child care and preschool, care for children and adults when regular arrangements are unavailable, and education-related programs for employers. Founded in 1986, the company works with employers and families through a network of early education and care centers and employer-sponsored programs.