Critical Analysis: Grand Canyon Education (NASDAQ:LOPE) & H&R Block (NYSE:HRB)

H&R Block (NYSE:HRB) and Grand Canyon Education (NASDAQ:LOPE) are both mid-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Risk & Volatility

H&R Block has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500. Comparatively, Grand Canyon Education has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Valuation & Earnings

This table compares H&R Block and Grand Canyon Education”s top-line 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	1.51	$733.60 million	$5.72	8.50
Grand Canyon Education	$1.11 billion	3.81	$216.17 million	$8.27	19.54

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

Institutional & Insider Ownership

90.1% of H&R Block shares are held by institutional investors. Comparatively, 94.2% of Grand Canyon Education shares are held by institutional investors. 0.7% of H&R Block shares are held by company insiders. Comparatively, 2.1% of Grand Canyon Education shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares H&R Block and Grand Canyon Education’s 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%
Grand Canyon Education	19.63%	36.62%	26.87%

Analyst Ratings

This is a summary of recent ratings and recommmendations for H&R Block and Grand Canyon Education, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
H&R Block	1	2	1	1	2.40
Grand Canyon Education	0	1	3	0	2.75

H&R Block currently has a consensus price target of $46.67, indicating a potential downside of 4.06%. Grand Canyon Education has a consensus price target of $160.67, indicating a potential downside of 0.57%. Given Grand Canyon Education’s stronger consensus rating and higher probable upside, analysts clearly believe Grand Canyon Education is more favorable than H&R Block.

Summary

Grand Canyon Education beats H&R Block on 12 of the 15 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 Grand Canyon Education

Grand Canyon Education, Inc. provides education services to colleges and universities in the United States. It offers technology services, including learning management system, internal administration, infrastructure, and support services; academic services, such as program and curriculum, faculty and related training and development, class scheduling, and skills and simulation lab sites; and counseling services and support services comprising admission, financial aid, and field experience and other counseling services. The company also offers marketing and communication services that include lead acquisition, digital communications strategy, brand identity, media planning and strategy, video, business intelligence and data science, and market research services; and back-office services consisting of finance and accounting, human resources, audit, and procurement services. In addition, it provides education services to 25 university partners. Grand Canyon Education, Inc. was founded in 1949 and is headquartered in Phoenix, Arizona.