Investors looking for stocks in the Schools sector might want to consider either American Public Education (APEI) or Grand Canyon Education (LOPE). But which of these two companies is the best option for those looking for undervalued stocks? 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 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, both American Public Education and Grand Canyon Education are sporting a Zacks Rank of #2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
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 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.
APEI currently has a forward P/E ratio of 20.95, while LOPE has a forward P/E of 21.55. We also note that APEI has a PEG ratio of 1.40. 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. LOPE currently has a PEG ratio of 1.44.
Another notable valuation metric for APEI is its P/B ratio of 1.99. 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, LOPE has a P/B of 6.87.
Based on these metrics and many more, APEI holds a Value grade of A, while LOPE has a Value grade of C.
Both APEI and LOPE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that APEI is the superior value option right now.
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American Public Education, Inc. (APEI): Free Stock Analysis Report Grand Canyon Education, Inc. (LOPE): Free Stock Analysis Report Compagnie Financiere Richemont AG (CFRUY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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