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DeVry Education Group Inc. (DV - Analyst Report) recently announced the launch of new scholarship programs at two of its healthcare schools.

While Ross University School of Medicine introduced 12 merit-based scholarship programs, American University of the Caribbean School of Medicine (AUC) launched 8 such scholarships to help qualified students fund their medical education.

Revenues at DeVry Medical International (DMI) — which includes Ross University and AUC — grew 7% in the second quarter driven by enrollment growth. We believe these scholarships would drive revenues at DMI further in the next quarter.

In fact, DeVry’s healthcare institutions have been doing quite well for the past two years. Strong enrollment trends in DeVry’s healthcare and international segments have been offsetting the challenging environment for the flagship DeVry University for the past two years.

The healthcare institutions, especially Chamberlain and Ross, are gaining from increased demand for nurses and physicians across the U.S. In fact, revenues of the Medical and Healthcare segment have grown at a 32% compound annual growth rate since 2008. Moreover, DeVry’s medical schools produce strong student outcomes and have very low cohort default rates.

DeVry’s Medical and Healthcare segment includes healthcare schools like Ross University Schools of Medicine and Veterinary Medicine, AUC, Chamberlain College of Nursing and Carrington Colleges.

With strong growth witnessed in the last two years, management believes the medical and healthcare segment is poised to increase organic revenues and operating income at a double-digit pace over the next three to five years.

Other Stocks to Consider

DeVry carries a Zacks Rank #3 (Hold). Better-ranked stocks in the education industry include Capella Education Company (CPLA - Analyst Report), Strayer Education, Inc. (STRA - Analyst Report), and Grand Canyon Education Inc. (LOPE - Snapshot Report). All the three stocks carry a Zacks Rank #2 (Buy).

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