McGraw Hill, Inc. (MH) vs Strategic Education Inc. (STRA)

McGraw Hill, Inc. and Strategic Education Inc. are both Education & Training Services companies. McGraw Hill, Inc. is the larger, with a market value of $2.7B against $1.8B — 1.5× the size. Strategic Education Inc. trades at the lower P/E: 13.2× against 27.7×. Strategic Education Inc. grew revenue faster over the last twelve months: 3.53% against 0.14%. Strategic Education Inc. has the higher net margin (10.5% vs 4.38%) and the higher return on invested capital (7.49% vs 5.81%). Across the 20 metrics below, Strategic Education Inc. leads on 15 and McGraw Hill, Inc. on 5.

Valuation

Metric MH STRA Education & Training Services median
P/E 27.68 13.22 13.22
P/S 1.25 1.35 0.99
P/B 3.36 1.06 1.62
Price to free cash flow 12.89 10.18 10.06
EV/EBITDA 6.51 7.37 8.56
EV/Sales 2.37 1.30 0.78
Earnings yield 3.61% 7.56% 3.17%
Free cash flow yield 7.76% 9.82% 2.81%

Profitability

Metric MH STRA Education & Training Services median
Gross margin 81.65% 49.06% 54.64%
Operating margin 13.93% 14.01% 0.00%
Net margin 4.38% 10.46% 2.98%
Free cash flow margin 9.70% 13.28% 0.00%
Return on equity 17.30% 8.15% 0.00%
Return on assets 1.68% 6.47% 0.00%
Return on invested capital 5.81% 7.49% 0.00%

Growth

Metric MH STRA Education & Training Services median
Revenue growth (TTM) 0.14% 3.53% 6.97%
EPS growth (last fiscal year) 136.88% 15.85% 15.68%
Revenue growth, 5-year CAGR — 4.30% 4.27%
Net income growth, 5-year CAGR — 7.98% 0.00%

Health

Metric MH STRA Education & Training Services median
Debt to equity 3.27 0.00 0.05
Current ratio 0.78 1.10 1.33
Net debt to EBITDA 3.07 (0.66) (0.15)

Dividend

Metric MH STRA Education & Training Services median
Dividend yield — 2.95% 1.84%
Payout ratio — 0.40 0.23

Size

Metric MH STRA Education & Training Services median
Market cap 2.72b 1.83b 68.84m

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