ATGE or LINC: Which Is the Better Value Stock Right Now?

Investors with an interest in Schools stocks have likely encountered both Adtalem Global Education (ATGE) and 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Adtalem Global Education has a Zacks Rank of #2 (Buy), while Lincoln Educational Services Corporation has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that ATGE 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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ATGE currently has a forward P/E ratio of 14.09, while LINC has a forward P/E of 29.61. We also note that ATGE has a PEG ratio of 0.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LINC currently has a PEG ratio of 1.97.

Another notable valuation metric for ATGE is its P/B ratio of 2.75. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, LINC has a P/B of 4.23.

These metrics, and several others, help ATGE earn a Value grade of A, while LINC has been given a Value grade of D.

ATGE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ATGE is likely the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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