Contrasting Alliance Entertainment (NASDAQ:AENT) and Pearson (NYSE:PSO)

Pearson (NYSE:PSO) and Alliance Entertainment (NASDAQ:AENT) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Analyst Ratings

This is a summary of recent ratings for Pearson and Alliance Entertainment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pearson	0	4	2	1	2.57
Alliance Entertainment	0	2	2	0	2.50

Pearson currently has a consensus target price of $18.00, indicating a potential upside of 36.93%. Alliance Entertainment has a consensus target price of $10.67, indicating a potential upside of 54.37%. Given Alliance Entertainment’s higher probable upside, analysts plainly believe Alliance Entertainment is more favorable than Pearson.

Insider & Institutional Ownership

2.1% of Pearson shares are held by institutional investors. Comparatively, 0.3% of Alliance Entertainment shares are held by institutional investors. 0.1% of Pearson shares are held by company insiders. Comparatively, 77.6% of Alliance Entertainment 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.

Risk and Volatility

Pearson has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500. Comparatively, Alliance Entertainment has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Profitability

This table compares Pearson and Alliance Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pearson	N/A	N/A	N/A
Alliance Entertainment	1.80%	21.87%	5.91%

Valuation and Earnings

This table compares Pearson and Alliance Entertainment”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pearson	$4.54 billion	1.84	$554.61 million	N/A	N/A
Alliance Entertainment	$1.06 billion	0.33	$15.08 million	$0.39	17.72

Pearson has higher revenue and earnings than Alliance Entertainment.

About Pearson

Pearson plc offers educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally. The company operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills, and Higher Education. The Assessment & Qualifications segment offers Pearson VUE, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications and associated courseware. The Virtual Learning segment provides virtual schools and online program management services. The English Language Learning segment offers Pearson test of English, institutional courseware, and English online solutions. The Workforce Skills offers BTEC, GED, TalentLens, Faethm, Credly, Pearson college, and apprenticeships. The Higher Education segment engages in the US, Canadian, and international higher education courseware businesses. The company was founded in 1844 and is headquartered in London, the United Kingdom.

About Alliance Entertainment

Alliance Entertainment Holding Corporation operates as a wholesaler, distributor, and e-commerce provider for the entertainment industry worldwide. It offers vinyl records, video games, digital video discs, blu-rays, toys, compact discs, collectibles, and other entertainment and consumer products. The company also provides third party logistics products and services. It distributes its physical media, entertainment products, hardware, and accessories through multi-channel strategy. The company was founded in 1990 and is headquartered in Plantation, Florida.