Critical Comparison: Barnes & Noble Education (NYSE:BNED) versus School Specialty (OTCMKTS:SCOO)

School Specialty (OTCMKTS:SCOO) and Barnes & Noble Education (NYSE:BNED) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, valuation, analyst recommendations, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current ratings and target prices for School Specialty and Barnes & Noble Education, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
School Specialty	0	0	0	0	0.00
Barnes & Noble Education	1	1	2	0	2.25

Barnes & Noble Education has a consensus price target of $17.25, suggesting a potential upside of 37.01%. Given Barnes & Noble Education’s stronger consensus rating and higher possible upside, analysts clearly believe Barnes & Noble Education is more favorable than School Specialty.

Earnings and Valuation

This table compares School Specialty and Barnes & Noble Education”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
School Specialty	N/A	N/A	N/A	N/A	N/A
Barnes & Noble Education	$1.71 billion	0.25	$16.87 million	$0.47	26.79

Barnes & Noble Education has higher revenue and earnings than School Specialty.

Institutional and Insider Ownership

38.5% of Barnes & Noble Education shares are held by institutional investors. 41.0% of School Specialty shares are held by insiders. Comparatively, 1.2% of Barnes & Noble Education shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares School Specialty and Barnes & Noble Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
School Specialty	N/A	N/A	N/A
Barnes & Noble Education	0.98%	7.92%	2.29%

Summary

Barnes & Noble Education beats School Specialty on 8 of the 9 factors compared between the two stocks.

About School Specialty

School Specialty, Inc., together with its subsidiaries, provides supplies, furniture, technology products, and curriculum solutions to the education marketplace in the United States and Canada. The company’s Distribution segment offers office products, classroom supplies, janitorial and sanitation supplies, school equipment, school and student safety and security products and services, physical education products, art supplies and paper, and others; physical education programs, solutions, resources, and equipment to improve student and staff wellness; and science education products, supplemental curriculum, and lab equipment and supplies. It also provides supplemental learning materials, teaching resources, classroom libraries, and manipulatives; intervention products; educator-inspired quality audio technology products, including multi-media, audio visual, and presentation equipment for the PreK-12 education market; and school-specific furniture and equipment for in-school, in-classroom, and outdoor use, as well as project management and design services for school refurbishment and new construction projects. This segment offers its products under the Childcraft, Sax Arts & Crafts, Califone, Classroom Select, Sportime, Abilitations, Hammond & Stephens, Brodhead Garrett, School Smart, Royal Seating, Projects by Design, CPO Science, Frey Scientific, Educator’s Publishing Service, Wordly Wise 3000, Explode the Code, ThinkMath!, SSI Guardian, Making Connections, S.P.I.R.E, Buckle Down, and Coach brands. Its Curriculum segment develops and sells standards-based curriculum science products, such as laboratory supplies and equipment, and furniture under the FOSS, Frey Scientific, Delta Science Module, Delta Education, CPO Science, and Neo/SCI brand names. The company offers its products through its sales force, catalogs, and its proprietary e-commerce Websites. School Specialty, Inc. was founded in 1959 and is headquartered in Greenville, Wisconsin.

About Barnes & Noble Education

Barnes and Noble Education, Inc. engages in the management and operation of bookstore chains in universities. It operates through the Retail and Wholesale segments. The Retail segment operates college, university, and K-12 school bookstores, physical bookstores, and virtual bookstores. The Wholesale segment sells and distributes new and used textbooks to physical bookstores. The company was founded by Leonard S, Riggio in 1965 and is headquartered in Basking Ridge, NJ.