I was poring over FTSE 100 performance data when I spotted a growth stock that’s totally passed me by.

It’s up a staggering 145% over the past five years, making it one of the UK’s best blue-chip performers. The success continues, up 33% in the last year.

The company in question is online education publisher Pearson (LSE: PSON). And now I’m wishing I paid more attention to it in class.

On checking, I discovered that I last wrote about Pearson back in May 2023, in what was in a pivotal time for the stock.

ChatGPT had just exploded onto the scene, and investors were worried about the impact on Pearson. Why pay for its traditional educational resources when punters could get it all for free thanks to the miracle of AI?

This share is smashing the FTSE 100

Shares in Pearson had just plunged 15% in a single day after US rival Chegg said it had been hit hard by the rise of ChatGPT as students jumped horses. 

Pearson’s board remained steadfast though, asserting that 80% of its revenues were generated outside the education sector, and it wasn’t worried.

I was though, and decided to refrain from buying the stock while I saw how things pan out. Pearson has done fabulously without me, but it wasn’t a racing certainty. The Chegg share price has crashed 98% in five years.

Fast forward to February 28 this year and Pearson’s resilience is evident. The company’s annual results showcased a 10% increase in adjusted operating profits to £600m, with a 3% rise in underlying sales to £3.5bn. 

The board rewarded loyal investors with a £350m share buyback and a 6% hike in the final dividend to 24p per share.

Pearson has been boosted by its strategic pivot towards digital and AI-driven solutions,while expanding its partnership with Amazon Web Services (AWS) to further integrate AI into its offerings. 

It now offers children access to an AI tutor to help with their homework, plus tools to help teachers enhance lesson planning.

All of which is great. I’m happy it’s doing well. The big question is whether it’s still worth considering today.

Dividend policy is progressive

My first thought is that Pearson a bit pricey, with a price-to-earnings (P/E) ratio of almost 22. That’s fair enough though. There’s a price to pay for success.

The trailing dividend yield is a modest 1.75%, despite that recenet 6% hike. But that’s what happens when a share price rockets like this one. The growth more than makes up for it though.

The consensus among nine analysts suggests a median one-year share price target of 1,381p. If accurate, this represents a mere 2% increase from today. This aligns with my concerns that the stock’s rapid ascent may be tapering off.

It looks like I’ve missed out on most of the fireworks. I still think it’s well worth considering with a long-term view. Rather than falling victim to ChatGPT and their ilk, the board has turned AI to its advantage. But it will have to keep on its toes.