TAL Education Vs. Yum China: Which Chinese Stock Is A Better Buy?

Great Wall of China

Source: Unsplash 

China stocks have become much more attractive now that former President Trump has left office. President Biden appears to be more willing to work with the country on economic matters.

Unlike the former President, President Biden is less likely to delist China stocks from U.S. stock exchanges. This is good news for investors of Chinese companies. 

Tal Education Group (TAL) and Yum China Holdings (YUMC) are two of the top China stocks available to the investing public. Below, I provide a look at these two stocks to help investors determine which has more merit.

Tal Education Group (TAL)

TAL is a K through 12 educational services provider. To be more specific, TAL provides tutoring services to Chinese students. These tutoring services are provided in small classes as well as customized premium one-on-one services. Furthermore, TAL also provides tutoring through its convenient online learning platform.

TAL is a POWR Ratings dud with an overall grade of D, which translates into a Sell rating. TAL has a Growth Grade of F and grades of D in the Momentum, Value, and Sentiment components. Click here to find out how TAL grades in the Quality and Stability components. Out of 70 publicly traded companies in the China industry, TAL is ranked 63rd. You can find top stocks in this industry by clicking here.

Analysts are bullish on TAL, establishing an average target price of $82.59 for the stock. If TAL hits this anticipated price point, it will have popped by 72%. TAL’s average target price has increased by nearly $16 across the prior 130 days. Goldman recently reduced its price target for TAL, yet the bank still believes the stock is underpriced and will increase 33% in the year ahead.

TAL appears to be quite overvalued with a forward P/E ratio of 64.71. Making matters worse is the forward P/E is elevated even though TAL is trading within $5 of its 52-week low. In other words, if TAL bounces back, its forward P/E ratio will move even higher.

1 2
View single page >> |

Disclaimer: Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use, please ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.