Investors looking for stocks in the Schools sector might want to consider either American Public Education (APEI) or Lincoln Educational Services Corporation (LINC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, American Public Education is sporting a Zacks Rank of #2 (Buy), while Lincoln Educational Services Corporation has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that APEI likely has seen a stronger improvement to its earnings outlook than LINC has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
APEI currently has a forward P/E ratio of 22.31, while LINC has a forward P/E of 31.46. We also note that APEI has a PEG ratio of 1.49. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LINC currently has a PEG ratio of 2.10.
Another notable valuation metric for APEI is its P/B ratio of 2.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LINC has a P/B of 4.03.
These are just a few of the metrics contributing to APEI's Value grade of A and LINC's Value grade of D.
APEI stands above LINC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that APEI is the superior value option right now.
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American Public Education, Inc. (APEI): Free Stock Analysis Report Lincoln Educational Services Corporation (LINC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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