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EDU vs. UTI: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Schools sector have probably already heard of New Oriental Education (EDU - Free Report) and Universal Technical Institute (UTI - 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.
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.
New Oriental Education and Universal Technical Institute are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This means that EDU's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
EDU currently has a forward P/E ratio of 15.15, while UTI has a forward P/E of 51.51. We also note that EDU has a PEG ratio of 0.81. 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. UTI currently has a PEG ratio of 3.43.
Another notable valuation metric for EDU is its P/B ratio of 2.12. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, UTI has a P/B of 6.5.
Based on these metrics and many more, EDU holds a Value grade of B, while UTI has a Value grade of D.
EDU stands above UTI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EDU is the superior value option right now.
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EDU vs. UTI: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Schools sector have probably already heard of New Oriental Education (EDU - Free Report) and Universal Technical Institute (UTI - 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.
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.
New Oriental Education and Universal Technical Institute are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This means that EDU's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
EDU currently has a forward P/E ratio of 15.15, while UTI has a forward P/E of 51.51. We also note that EDU has a PEG ratio of 0.81. 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. UTI currently has a PEG ratio of 3.43.
Another notable valuation metric for EDU is its P/B ratio of 2.12. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, UTI has a P/B of 6.5.
Based on these metrics and many more, EDU holds a Value grade of B, while UTI has a Value grade of D.
EDU stands above UTI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EDU is the superior value option right now.