PRDO vs. LINC: Which Stock Is the Better Value Option?
Investors interested in Schools stocks are likely familiar with Perdoceo Education (PRDO) and Lincoln Educational Services Corporation (LINC). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, both Perdoceo Education and Lincoln Educational Services Corporation are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
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.
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.
PRDO currently has a forward P/E ratio of 13.25, while LINC has a forward P/E of 32.01. We also note that PRDO has a PEG ratio of 0.88. 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 2.13.
Another notable valuation metric for PRDO is its P/B ratio of 2.23. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, LINC has a P/B of 4.10.
These are just a few of the metrics contributing to PRDO's Value grade of A and LINC's Value grade of C.
Both PRDO and LINC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PRDO is the superior value option right now.
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See This Stock Now for Free >>Perdoceo Education Corporation (PRDO) : Free Stock Analysis Report
Lincoln Educational Services Corporation (LINC) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
