PSO vs STRA

For growth investors, Strategic Education, Inc.

(STRA) is the stronger pick with 4. 0% revenue growth year-over-year, versus -3. 3% for Pearson plc (PSO). Strategic Education, Inc. (STRA) offers the better valuation at 14. 5x trailing P/E (10. 9x forward), making it the more compelling value choice. Analysts rate Strategic Education, Inc. (STRA) a "Buy" — based on 18 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, Strategic Education, Inc.

(STRA) is the cheapest at 14. 5x versus Pearson plc at 17. 8x. On forward P/E, Strategic Education, Inc. is actually cheaper at 10. 9x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Strategic Education, Inc. wins at 1. 45x versus Pearson plc's 1. 67x — a reasonable growth-adjusted valuation.

Over the past 5 years, Pearson plc (PSO) delivered a total return of +45.

0%, compared to +19. 5% for Strategic Education, Inc. (STRA). Over 10 years, the gap is even starker: STRA returned +114. 7% versus PSO's +54. 9%. 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 Strategic Education, Inc. 's 0. 48β — meaning STRA is approximately 29% more volatile than PSO relative to the S&P 500. On balance sheet safety, Strategic Education, Inc. (STRA) carries a lower debt/equity ratio of 7% versus 36% for Pearson plc — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Strategic Education, Inc.

(STRA) is pulling ahead at 4. 0% versus -3. 3% for Pearson plc (PSO). On earnings-per-share growth, the picture is similar: Pearson plc grew EPS 18. 9% year-over-year, compared to 16. 1% for Strategic Education, Inc.. Over a 3-year CAGR, STRA leads at 6. 0% 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.

Pearson plc (PSO) is the more profitable company, earning 12.

2% net margin versus 10. 0% for Strategic Education, Inc. — meaning it keeps 12. 2% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: STRA leads at 15. 5% versus 15. 2% for PSO. At the gross margin level — before operating expenses — PSO leads at 51. 0%, 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, Strategic Education, Inc. (STRA) is the more undervalued stock at a PEG of 1. 45x versus Pearson plc's 1. 67x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Strategic Education, Inc. (STRA) trades at 10. 9x forward P/E versus 21. 9x for Pearson plc — 11. 0x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for STRA: 10. 7% to $87. 00.

All stocks in this comparison pay dividends.

Strategic Education, Inc. (STRA) offers the highest yield at 3. 2%, versus 2. 0% for Pearson plc (PSO).

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. 0% yield). Both have compounded well over 10 years (PSO: +54. 9%, STRA: +114. 7%), 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.

These companies operate in different sectors (PSO (Communication Services) and STRA (Consumer Defensive)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

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.