Head to Head Comparison: Bright Horizons Family Solutions (NYSE:BFAM) vs. H&R Block (NYSE:HRB)

Bright Horizons Family Solutions (NYSE:BFAM) and H&R Block (NYSE:HRB) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, dividends, valuation, earnings, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for Bright Horizons Family Solutions and H&R Block, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bright Horizons Family Solutions	2	4	4	0	2.20
H&R Block	1	2	1	1	2.40

Bright Horizons Family Solutions currently has a consensus price target of $79.50, indicating a potential upside of 46.27%. H&R Block has a consensus price target of $46.67, indicating a potential downside of 10.57%. Given Bright Horizons Family Solutions’ higher possible upside, analysts clearly believe Bright Horizons Family Solutions is more favorable than H&R Block.

Earnings & Valuation

This table compares Bright Horizons Family Solutions and H&R Block”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bright Horizons Family Solutions	$2.93 billion	0.90	$193.12 million	($2.97)	-18.30
H&R Block	$3.95 billion	1.62	$733.60 million	$5.72	9.12

H&R Block has higher revenue and earnings than Bright Horizons Family Solutions. Bright Horizons Family Solutions is trading at a lower price-to-earnings ratio than H&R Block, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Bright Horizons Family Solutions has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, H&R Block has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500.

Profitability

This table compares Bright Horizons Family Solutions and H&R Block’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bright Horizons Family Solutions	5.78%	20.09%	6.35%
H&R Block	18.59%	-214.84%	22.56%

Institutional and Insider Ownership

90.1% of H&R Block shares are owned by institutional investors. 1.4% of Bright Horizons Family Solutions shares are owned by insiders. Comparatively, 0.7% of H&R Block shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

H&R Block beats Bright Horizons Family Solutions on 9 of the 15 factors compared between the two stocks.

About Bright Horizons Family Solutions

Bright Horizons Family Solutions Inc. provides early education and childcare, back-up care, educational advisory, and other workplace solutions services for employers and families in the United States, Puerto Rico, the United Kingdom, the Netherlands, Australia, and India. The company operates in three segments: Full Service Center-Based Child Care, Back-Up Care, and Educational Advisory and Other Services. The Full Service Center-Based Child Care segment offers traditional center-based child care and early education, preschool, and elementary education services. The Back-Up Care segment provides center-based back-up child care, in-home child and adult/elder dependent care, school-age camps, virtual tutoring, and self-sourced reimbursed care services through child care centers, school-age campuses, and in-home caregivers, as well as the back-up care network. The Educational Advisory and Other Services segment offers tuition assistance and student loan repayment program administration, workforce education, and related educational consulting services, as well as college admissions and college financial advisory services. The company was formerly known as Bright Horizons Solutions Corp. and changed its name to Bright Horizons Family Solutions Inc. in July 2012. Bright Horizons Family Solutions Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.

About H&R Block

H&R Block, Inc. engages in the provision of tax return preparation solutions, financial products and small business solutions. The company was founded by Henry W. Bloch and Richard A. Bloch on January 25, 1955, and is headquartered in Kansas City, MO.