Back to top

Image: Bigstock

LINC vs. AFYA: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors with an interest in Schools stocks have likely encountered both Lincoln Educational Services Corporation (LINC - Free Report) and Afya (AFYA - Free Report) . 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Lincoln Educational Services Corporation is sporting a Zacks Rank of #2 (Buy), while Afya has a Zacks Rank of #5 (Strong Sell). This means that LINC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.

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.

LINC currently has a forward P/E ratio of 13.42, while AFYA has a forward P/E of 27.16. We also note that LINC has a PEG ratio of 0.89. 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. AFYA currently has a PEG ratio of 1.10.

Another notable valuation metric for LINC is its P/B ratio of 2.25. 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, AFYA has a P/B of 4.60.

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

LINC has seen stronger estimate revision activity and sports more attractive valuation metrics than AFYA, so it seems like value investors will conclude that LINC is the superior option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Lincoln Educational Services Corporation (LINC) - free report >>

Afya Limited (AFYA) - free report >>

Published in