Investors interested in stocks from the Schools sector have probably already heard of American Public Education (APEI) and Lincoln Educational Services Corporation (LINC). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
American Public Education has a Zacks Rank of #1 (Strong Buy), while Lincoln Educational Services Corporation has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that APEI likely has seen a stronger improvement to its earnings outlook than LINC has recently. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
APEI currently has a forward P/E ratio of 20.34, while LINC has a forward P/E of 51.34. We also note that APEI has a PEG ratio of 1.36. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LINC currently has a PEG ratio of 3.42.
Another notable valuation metric for APEI is its P/B ratio of 2.93. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, LINC has a P/B of 5.69.
Based on these metrics and many more, APEI holds a Value grade of B, while LINC has a Value grade of D.
APEI sticks out from LINC in both our Zacks Rank and Style Scores models, so value investors will likely feel that APEI is the better 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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