PSO vs GOOG

For growth investors, Alphabet Inc.

(GOOG) is the stronger pick with 15. 1% revenue growth year-over-year, versus -3. 3% for Pearson plc (PSO). Pearson plc (PSO) offers the better valuation at 17. 6x trailing P/E (21. 7x forward), making it the more compelling value choice. Analysts rate Alphabet Inc. (GOOG) a "Buy" — based on 79 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Pearson plc (PSO) is the cheapest at 17.

6x versus Alphabet Inc. at 36. 6x. On forward P/E, Pearson plc is actually cheaper at 21. 7x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Alphabet Inc. wins at 1. 09x versus Pearson plc's 1. 65x — a reasonable growth-adjusted valuation.

Over the past 5 years, Alphabet Inc.

(GOOG) delivered a total return of +231. 0%, compared to +39. 7% for Pearson plc (PSO). Over 10 years, the gap is even starker: GOOG returned +1013% versus PSO's +56. 6%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Pearson plc (PSO) is the lower-risk stock at 0.

38β versus Alphabet Inc. 's 1. 23β — meaning GOOG is approximately 227% more volatile than PSO relative to the S&P 500. On balance sheet safety, Alphabet Inc. (GOOG) carries a lower debt/equity ratio of 14% versus 36% for Pearson plc — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Alphabet Inc.

(GOOG) is pulling ahead at 15. 1% versus -3. 3% for Pearson plc (PSO). On earnings-per-share growth, the picture is similar: Alphabet Inc. grew EPS 34. 5% year-over-year, compared to 18. 9% for Pearson plc. Over a 3-year CAGR, GOOG leads at 12. 5% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Alphabet Inc.

(GOOG) is the more profitable company, earning 32. 8% net margin versus 12. 2% for Pearson plc — meaning it keeps 32. 8% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: GOOG leads at 32. 1% versus 15. 2% for PSO. At the gross margin level — before operating expenses — GOOG leads at 59. 7%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Alphabet Inc. (GOOG) is the more undervalued stock at a PEG of 1. 09x versus Pearson plc's 1. 65x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Pearson plc (PSO) trades at 21. 7x forward P/E versus 32. 5x for Alphabet Inc. — 10. 7x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for GOOG: -3. 0% to $383. 41.

All stocks in this comparison pay dividends.

Pearson plc (PSO) offers the highest yield at 2. 1%, versus 0. 2% for Alphabet Inc. (GOOG).

For long-horizon retirement investors, Pearson plc (PSO) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.

38), 2. 1% yield). Both have compounded well over 10 years (PSO: +56. 6%, GOOG: +1013%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Communication Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: PSO is a small-cap deep-value stock; GOOG is a mega-cap high-growth stock. PSO pays a dividend while GOOG does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.