3 Reasons To Be Bullish About Pearson Publishing

Even in the age of Amazon AMZN, Apple AAPL, and Microsoft MSFT, there's still reason to be bullish about Pearson Publishing PSO, a British book publisher.

Educated Profit Margin

Pearson has a strong position in educational materials.

That results in a profit margin of 16.50 percent. Amazon's is only 0.20 percent. Yes, Amazon is plowing money into a massive expansion program. But the profit margin of Pearson challenges that of Apple and Microsoft, too.

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Yield

So does its dividend yield!

The dividend yield for Pearson is 5.68 percent. Amazon does not have a dividend yield for much the same reason its profit margin is lacking: there is a call on cash elsewhere. The dividend yield for Pearson is much higher than that for Apple or Microsoft, too.

A Falling Pound Would Bring Rising Profits

Pearson also has upside in that the strong pound is hurting sales abroad.

When the pound is stronger, British exports are more expensive. If the pound falls, Pearson becomes more competitive, For savvy investors, that is a factor that can result in higher profits as currency prices do fluctuate.

It has not been a good year for Pearson. But investors should take a long term outlook.

Earnings over the next five years are projected to be nearly 10 percent better than those for the previous half decade. With the dividend and currency considerations, that should reward long term investors.