MH vs PSO: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: MH is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. MH and PSO share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined MH and PSO exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

McGraw Hill, Inc. is a global education company that provides curriculum, courseware, assessments, and adaptive-learning platforms across K-12 schools, higher education, and professional and international markets. It has moved well beyond its textbook roots: digital products such as its ALEKS adaptive-learning system and Connect courseware now drive the majority of revenue, and management emphasizes recurring subscription and licensing income over one-time print sales. The company was taken private by Apollo Global Management in 2013, merged plans with Cengage were abandoned, and it returned to the public market with a July 2025 IPO on the NYSE at $17 per share.

Full MH guide

Pearson plc is a ~180-year-old British education company that runs five global business units. Assessment & Qualifications is the largest, at ~£1,604 million of 2025 revenue, and covers Pearson VUE computer-based testing centres, Pearson Edexcel and BTEC qualifications in the UK and internationally, US state student assessment contracts, and clinical assessment products. Higher Education, at ~£775 million, is the US and international courseware business built around MyLab, Mastering and the Pearson+ subscription, now increasingly sold through Inclusive Access deals where the institution bundles materials into tuition. Virtual Learning, ~£511 million, operates full-time online public schools and the Pearson Online Academy under long-term contracts with US school districts and charter authorities. English Language Learning, ~£405 million, is the Pearson Test of English plus institutional English courseware. Enterprise Learning & Skills, ~£282 million, sells vocational qualifications and corporate reskilling programmes and is where the group's AI certification and partnership deals sit. The mix has moved decisively away from paper: of ~£3,577 million of 2025 revenue, ~£2,073 million was services, ~£972 million software and only ~£532 million print. The United States is by far the largest market at ~£2,400 million, or about ~67% of group revenue, with the UK at ~£450 million.

Full PSO guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• MH drivers: Shift to recurring digital revenue; Higher Education momentum and AI features.
• PSO drivers: Reskilling and enterprise as the intended growth engine; Virtual Learning compounding while Assessment stabilises.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: McGraw Hill still carries meaningful debt from its private-equity ownership, so a large share of operating cash flow goes to interest and principal rather than shareholders, and rising rates or a stumble in growth would pressure the equity. For PSO, the revenue line is the problem the profit line masks: trailing twelve-month revenue of ~£3,634 million is below what Pearson booked in 2022 and 2023, and English Language Learning declined ~3% in the first half as the Pearson Test of English met tougher study-abroad demand, tighter migration policy and geopolitical disruption that management expects to persist near term.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick MH if you believe its drivers more; PSO if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the MH and PSO guides.

MH. McGraw Hill trades at a market cap below its annual revenue, reflecting both its debt load, which sits ahead of shareholders, and modest overall top-line growth. The trailing P/E has been elevated near 50 times because net income only recently turned positive, so investors have leaned on EV/EBITDA and free cash flow instead. The stock traded around $9 to $10 in mid-July 2026, well below its $17 July 2025 IPO price, within a 52-week range of roughly $8.95 to $18.

PSO. These figures are approximate, stamped to August 2026, and drawn from Pearson's 2025 Form 20-F, the 2025 annual report and the 31 July 2026 interim results filed on Form 6-K, so check live data before acting on any of them. The single most common error with PSO is treating a screener's dollar figure as something Pearson reported: the company keeps its books in pounds sterling under IFRS, and at least one widely used screen has published the ~£3.63 billion trailing revenue figure with a dollar sign in front of it, which understates the business by roughly a third. The other thing worth holding in mind is the gap between statutory and adjusted profit, which for 2025 was ~£505 million of statutory operating profit against ~£614 million adjusted, mostly product development impairment and intangible amortisation, so the trailing multiple looks very different depending on which line you use.

Headline figures (approximate, JULY 2026): MH shows revenue (fy2026, ended march 2026) ~$2.10B (+0.1% YoY), recurring revenue ~$1.54B (+5.8%, ~73% of total), adjusted ebitda ~$744M (~35% margin), net income (fy2026) ~$35M (from a prior-year loss); PSO shows revenue (ttm, reported in gbp) ~£3,634 million for the twelve months to 30 June 2026 (roughly ~$4.9 billion translated at ~1.35 US dollars per pound, the rate Pearson uses for guidance); first-half 2026 revenue ~£1,779 million, up ~4% underlying from ~£1,722 million; full-year 2025 ~£3,577 million, profit First-half 2026 adjusted operating profit ~£276 million, up ~14% underlying, margin ~15.5% versus ~14.1%; statutory operating profit ~£252 million versus ~£240 million; profit for the period ~£149 million versus ~£166 million; adjusted diluted EPS ~28.6p and basic EPS ~24.0p. Full-year 2025 adjusted operating profit was ~£614 million and 2026 guidance is ~£640 million to ~£685 million, segment revenue and adjusted profit (h1 2026, gbp) Assessment & Qualifications ~£803 million revenue and ~£157 million profit; Higher Education ~£350 million and ~£21 million; Virtual Learning ~£280 million and ~£49 million; Enterprise Learning & Skills ~£180 million and ~£51 million; English Language Learning ~£166 million and a loss of ~£2 million, cash and balance sheet (gbp) First-half operating cash flow ~£337 million (up ~167%) and free cash flow ~£259 million (up ~66%); net debt ~£1,343 million at 30 June 2026 versus ~£1,069 million at 31 December 2025, or ~£944 million excluding leases; cash ~£339 million and total available liquidity around ~£1.3 billion; UK pension surplus ~£506 million; goodwill ~£2,452 million.

MH and PSO are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined MH and PSO exposure against your real portfolio. It is not an investment adviser.