Top pick for
Pearson plc (PSON) is a leading publishing business based in the UK. It opened the day at 579.4p after a previous close of 570.8p. During the day the price has varied from a low of 570.66p to a high of 581.4p. The latest price was 575p (25 minute delay). Pearson is listed on the London Stock Exchange (LSE) and employs 22,500 staff. All prices are listed in pence sterling.
Since the stock market crash in March caused by coronavirus, Pearson's share price has had significant positive movement.
Its last market close was 569.8p, which is 1.47% up on its pre-crash value of 561.4p and 30.45% up on the lowest point reached during the March crash when the shares fell as low as 436.8p.
If you had bought £1,000 worth of Pearson shares at the start of February 2020, those shares would have been worth £801.87 at the bottom of the March crash, and if you held on to them, then as of the last market close they'd be worth £1,005.30.
|52-week range||422.7p - 927.7p|
|50-day moving average||495.8572p|
|200-day moving average||545.5331p|
|Wall St. target price||770.6p|
|Dividend yield||0.2p (3.38%)|
|Earnings per share (TTM)||34p|
The technical analysis gauge below displays real-time ratings for the timeframes you select. This is not a recommendation, however. It represents a technical analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.
|1 week (2020-07-02)||575|
|1 month (2020-06-09)||8.08%|
|3 months (2020-04-09)||10.15%|
|6 months (2020-01-09)||-8.00%|
|1 year (2019-07-09)||-31.98%|
|2 years (2018-07-09)||-35.57%|
|3 years (2017-07-07)||-16.12%|
|5 years (2015-07-09)||-52.71%|
Valuing Pearson stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Pearson's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Pearson's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 17x. In other words, Pearson shares trade at around 17x recent earnings.
That's relatively low compared to, say, the trailing 12-month P/E ratio for the FTSE 250 at the end of September 2019 (19.71). The low P/E ratio could mean that investors are pessimistic about the outlook for the shares or simply that they're under-valued.
Pearson's EBITDA (earnings before interest, taxes, depreciation and amortisation) is £520 million.
The EBITDA is a measure of a Pearson's overall financial performance and is widely used to measure a its profitability.
|Revenue TTM||£3.9 billion|
|Operating margin TTM||9.69%|
|Gross profit TTM||£2 billion|
|Return on assets TTM||3.01%|
|Return on equity TTM||6.01%|
|Market capitalisation||£4.2 billion|
TTM: trailing 12 months
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Pearson.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 4.58
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Pearson's overall score of 4.58 (as at 03/01/2020) is excellent – landing it in it in the 1st percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Pearson is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
Environmental score: 0.98/100
Social score: 1.61/100
Governance score: 2.17/100
Controversy score: 2/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. Pearson scored a 2 out of 5 for controversy – the second-highest score possible, reflecting that Pearson has, for the most part, managed to keep its nose clean.
|Total ESG score||4.58|
|Total ESG percentile||0.96|
|Level of controversy||2|
Dividend payout ratio: 55.88% of net profits
Recently Pearson has paid out, on average, around 55.88% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 3.38% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Pearson shareholders could enjoy a 3.38% return on their shares, in the form of dividend payments. In Pearson's case, that would currently equate to about 0.2p per share.
Pearson's payout ratio would broadly be considered high, and as such this stock could appeal to those looking to generate an income. Bear in mind however that companies should normally also look to re-invest a decent amount of net profits to ensure future growth.
The latest dividend was paid out to all shareholders who bought their shares by 26 March 2020 (the "ex-dividend date").
Pearson's shares were split on a 2:1 basis on 15 June 1992. So if you had owned 1 share the day before before the split, the next day you'd have owned 2 shares. This wouldn't directly have changed the overall worth of your Pearson shares – just the quantity. However, indirectly, the new 50% lower share price could have impacted the market appetite for Pearson shares which in turn could have impacted Pearson's share price.
Over the last 12 months, Pearson's shares have ranged in value from as little as 422.7p up to 927.7p. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (LSE average) beta is 1, while Pearson's is -0.4648. This would suggest that Pearson's shares have been inversely-correlated to the average (for this exchange) – so when the broader market trended up or down, Pearson has bucked the trend.
Pearson plc provides educational products and services to governments, educational institutions, corporations, and professional bodies worldwide. The company operates through North America, Core, and Growth segments. It offers courseware services, including curriculum materials provided in book form and/or through access to digital content; and assessments, such as test development, processing, and scoring services. The company also operates schools, colleges, and universities; and provides online learning services in partnership with universities and other academic institutions. In addition, it delivers and installs off-the-shelf software; and offers services to academic institutions, such as program development, student acquisition, education technology, and student support services, as well as undertakes contracts to process qualifying tests for individual professions and government departments under multi-year contractual arrangements. The company was founded in 1844 and is headquartered in London, the United Kingdom.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.