Contrasting Youdao (NYSE:DAO) & ITT Educational Services (OTCMKTS:ESINQ)

ITT Educational Services (OTCMKTS:ESINQ) and Youdao (NYSE:DAO) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Profitability

This table compares ITT Educational Services and Youdao’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ITT Educational Services	N/A	N/A	N/A
Youdao	1.19%	-4.51%	4.89%

Valuation & Earnings

This table compares ITT Educational Services and Youdao”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ITT Educational Services	N/A	N/A	N/A	N/A	N/A
Youdao	$822.04 million	2.68	$15.35 million	$0.09	203.44

Youdao has higher revenue and earnings than ITT Educational Services.

Institutional and Insider Ownership

62.7% of ITT Educational Services shares are owned by institutional investors. Comparatively, 21.9% of Youdao shares are owned by institutional investors. 3.8% of ITT Educational Services shares are owned by company insiders. Comparatively, 43.0% of Youdao shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for ITT Educational Services and Youdao, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ITT Educational Services	0	0	0	0	0.00
Youdao	1	0	1	0	2.00

Given ITT Educational Services’ higher probable upside, research analysts clearly believe ITT Educational Services is more favorable than Youdao.

Summary

Youdao beats ITT Educational Services on 6 of the 9 factors compared between the two stocks.

About ITT Educational Services

ITT Educational Services, Inc. provides postsecondary degree programs in the United States. It offers master, bachelor, and associate degree programs to approximately 45,000 students; and short-term information technology and business learning solutions for career advancers and other professionals. The company's business education programs include accounting, business administration, financial services, manufacturing, marketing and advertising, and sales; and drafting and design programs consist of architectural and construction drafting, civil drafting, computer aided drafting, electrical and electronics drafting, industrial engineering technology, interior design, landscape architecture, mechanical drafting, and multimedia communications. Its electronics technology programs include communications, computer technology, electronics product design and fabrication, industrial electronics, instrumentation, and telecommunications; and criminal justice programs include corrections, cyber security, investigations, and security and policing. The company's IT programs include communications, network administration, network technology, software development, systems technology, and technical support; and Breckinridge school of nursing and health sciences programs comprise health information technology, medical assisting and administration, and nursing. As of December 31, 2015, it had 138 college locations in 39 states. The company was founded in 1946 and is headquartered in Carmel, Indiana. On September 16, 2016, ITT Educational Services Inc. along with its affiliates filed a voluntary petition for liquidation under Chapter 7 in the U.S. Bankruptcy Court for the Southern District of Indiana.

About Youdao

Youdao, Inc., an internet technology company, provides online services in the field of content, community, communication, and commerce in China. It operates through three segments: Learning Services, Smart Devices, and Online Marketing Services. The company provides various learning content, applications, and solutions, which cover topics and target people from various age groups for their learning needs through its websites and mobile applications. It offers online knowledge tools, which include Youdao and other dictionaries and translation tools; learning services consisting of tutoring, fee-based premium, and other services; STEAM courses, adult and vocational courses, and other courses, such as China University MOOC; smart devices, such as Youdao Dictionary Pen, Youdao Listening Pod, Youdao Smart light, Youdao Pocket Translator, and Youdao Super Dictionary; education digitalization solutions comprising technologies and solutions licensed to schools or enterprise customers, such as Youdao Smart Learning Terminal, Youdao Sports, and Youdao Smart Cloud; and online marketing services. In addition, the company provides online courses comprising Youdao Premium Courses and NetEase Cloud Classroom, as well as technical support to the variable interest entities (VIEs). Youdao, Inc. was founded in 2006 and is headquartered in Hangzhou, China. Youdao, Inc. is a subsidiary of NetEase, Inc.