LSE:PSON

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Executive Summary

Pearson plc provides educational products and services to governments, educational institutions, corporations, and professional bodies worldwide. More Details


Snowflake Analysis

Flawless balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has Pearson's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PSON is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: PSON's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

1.9%

PSON

0.7%

GB Media

-0.2%

GB Market


1 Year Return

5.1%

PSON

-14.4%

GB Media

-6.8%

GB Market

Return vs Industry: PSON exceeded the UK Media industry which returned -20.4% over the past year.

Return vs Market: PSON exceeded the UK Market which returned -10.7% over the past year.


Shareholder returns

PSONIndustryMarket
7 Day1.9%0.7%-0.2%
30 Day30.4%23.6%14.7%
90 Day23.4%29.2%7.6%
1 Year9.0%5.1%-12.0%-14.4%-3.1%-6.8%
3 Year0.9%-7.1%-18.0%-29.1%2.6%-9.9%
5 Year6.5%-13.0%-16.9%-34.9%31.1%1.5%

Long-Term Price Volatility Vs. Market

How volatile is Pearson's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Pearson undervalued compared to its fair value and its price relative to the market?

2.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PSON (£6.65) is trading below our estimate of fair value (£6.82)

Significantly Below Fair Value: PSON is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PSON is poor value based on its PE Ratio (19.3x) compared to the GB Media industry average (18.8x).

PE vs Market: PSON is good value based on its PE Ratio (19.3x) compared to the UK market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: PSON is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: PSON's PB Ratio (1.2x) is in line with the GB Media industry average.


Next Steps

Future Growth

How is Pearson forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

6.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PSON's forecast earnings growth (6.5% per year) is above the savings rate (1.2%).

Earnings vs Market: PSON's earnings (6.5% per year) are forecast to grow slower than the UK market (27.1% per year).

High Growth Earnings: PSON's earnings are forecast to grow, but not significantly.

Revenue vs Market: PSON's revenue (3.9% per year) is forecast to grow slower than the UK market (6.8% per year).

High Growth Revenue: PSON's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PSON's Return on Equity is forecast to be low in 3 years time (5.6%).


Next Steps

Past Performance

How has Pearson performed over the past 5 years?

40.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PSON has high quality earnings.

Growing Profit Margin: PSON's current net profit margins (7.5%) are lower than last year (10.9%).


Past Earnings Growth Analysis

Earnings Trend: PSON has become profitable over the past 5 years, growing earnings by 40.8% per year.

Accelerating Growth: PSON's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PSON had negative earnings growth (-40.6%) over the past year, making it difficult to compare to the Media industry average (-32.4%).


Return on Equity

High ROE: PSON's Return on Equity (6.3%) is considered low.


Next Steps

Financial Health

How is Pearson's financial position?


Financial Position Analysis

Short Term Liabilities: PSON's short term assets (£2.9B) exceed its short term liabilities (£1.5B).

Long Term Liabilities: PSON's short term assets (£2.9B) exceed its long term liabilities (£1.8B).


Debt to Equity History and Analysis

Debt Level: PSON's debt to equity ratio (25.5%) is considered satisfactory.

Reducing Debt: PSON's debt to equity ratio has reduced from 51.2% to 25.5% over the past 5 years.

Debt Coverage: PSON's debt is well covered by operating cash flow (36.8%).

Interest Coverage: PSON's interest payments on its debt are well covered by EBIT (5.6x coverage).


Balance Sheet


Next Steps

Dividend

What is Pearson current dividend yield, its reliability and sustainability?

2.93%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PSON's dividend (2.93%) is higher than the bottom 25% of dividend payers in the UK market (1.69%).

High Dividend: PSON's dividend (2.93%) is low compared to the top 25% of dividend payers in the UK market (4.96%).


Stability and Growth of Payments

Stable Dividend: PSON's dividend payments have been volatile in the past 10 years.

Growing Dividend: PSON's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (56.6%), PSON's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PSON's dividends in 3 years are forecast to be well covered by earnings (48.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure


CEO

Andy Bird (56 yo)

0.083

Tenure

Mr. Adam Bird, also known as Andy, CBE, has been Chief Executive of Pearson plc since October 19, 2020. He served as President of Walt Disney International Operations of Walt Disney Co., an affiliate of Th...


Leadership Team

NamePositionTenureCompensationOwnership
John Fallon
0.083yrUK£1.86m0.060%
£ 2.9m
Adam Bird
Chief Executive & Director0.083yrno data0.078%
£ 3.8m
Sally Kate Johnson
CFO & Executive Director0.58yrno data0.0016%
£ 78.1k
Albert Hitchcock
Chief Technology & Operations Officerno datano data0.019%
£ 915.3k
Joanne Russell
Senior Vice President of Investor Relationsno datano datano data
Cinthia Nespoli
Chief Legal Officer0.83yrno datano data
Alexa Christon
Chief Marketing Officer0.50yrno datano data
Anna Persson
Chief Human Resources Officer2.75yrsno datano data
Tim Bozik
President of Global Product & North America Courseware4.83yrsno datano data
Kenneth Bristow
President of Pearson UK & Global Online Learning10.83yrsno data0.014%
£ 687.8k
Deepak Mehrotra
Managing Director of India Business7.08yrsno datano data
Giovanni Giovannelli
President of Internationalno datano datano data

0.8yrs

Average Tenure

55.5yo

Average Age

Experienced Management: PSON's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Adam Bird
Chief Executive & Director0.083yrno data0.078%
£ 3.8m
Sally Kate Johnson
CFO & Executive Director0.58yrno data0.0016%
£ 78.1k
Thomas Rabe
Chairman & CEO of Bertelsmannno datano datano data
Sidney Taurel
Independent Chairman4.83yrsUK£508.00k0.029%
£ 1.4m
Tim Score
Independent Non-Executive Director5.83yrsUK£117.00k0.0062%
£ 299.8k
Vivienne Cox
Senior Independent Director8.83yrsUK£129.00k0.0011%
£ 55.8k
David Poldoian
Member of Strategic Advisory Board13yrsno datano data
Robert Olin
Member of Strategic Advisory Board13yrsno datano data
Anne Moore
Member of Strategic Advisory Board13yrsno datano data
Sue McKnight
Member of Strategic Advisory Board13yrsno datano data
Tom Maier
Member of Strategic Advisory Board13yrsno datano data
Elizabeth P. Corley
Independent Non-Executive Director6.5yrsUK£115.00k0.0040%
£ 196.0k

8.8yrs

Average Tenure

60yo

Average Age

Experienced Board: PSON's board of directors are considered experienced (8.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PSON insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Pearson plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Pearson plc
  • Ticker: PSON
  • Exchange: LSE
  • Founded: 1844
  • Industry: Publishing
  • Sector: Media
  • Market Cap: UK£4.851b
  • Shares outstanding: 749.72m
  • Website: https://www.pearson.com

Number of Employees


Location

  • Pearson plc
  • 80 Strand
  • London
  • Greater London
  • WC2R 0RL
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PSOR.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
PSONLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
PESDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
PESXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURJan 1992
PSONLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
PSONYSE (New York Stock Exchange)SPONSORED ADRUSUSDSep 2000
PESADB (Deutsche Boerse AG)SPONSORED ADRDEEURSep 2000

Biography

Pearson plc provides educational products and services to governments, educational institutions, corporations, and professional bodies worldwide. The company operates through North America, Core, and Growt...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/01 18:44
End of Day Share Price2020/12/01 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.