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

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Investors interested in Schools stocks are likely familiar with Lincoln Educational Services Corporation (LINC - Free Report) and Afya (AFYA - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Lincoln Educational Services Corporation has a Zacks Rank of #2 (Buy), while Afya has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LINC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

LINC currently has a forward P/E ratio of 8.35, while AFYA has a forward P/E of 23.06. We also note that LINC has a PEG ratio of 0.56. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AFYA currently has a PEG ratio of 0.93.

Another notable valuation metric for LINC is its P/B ratio of 1.95. 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 2.78.

These are just a few of the metrics contributing to LINC's Value grade of A and AFYA's Value grade of C.

LINC stands above AFYA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LINC is the superior value option right now.


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