Back to top

APEI vs. STRA: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors with an interest in Schools stocks have likely encountered both American Public Education (APEI - Free Report) and Strayer Education (STRA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both American Public Education and Strayer Education 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 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.

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.

APEI currently has a forward P/E ratio of 26.70, while STRA has a forward P/E of 26.72. We also note that APEI has a PEG ratio of 1.78. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. STRA currently has a PEG ratio of 2.67.

Another notable valuation metric for APEI is its P/B ratio of 2.41. 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, STRA has a P/B of 5.64.

Based on these metrics and many more, APEI holds a Value grade of B, while STRA has a Value grade of C.

Both APEI and STRA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that APEI is the superior value option right now.




In-Depth Zacks Research for the Tickers Above


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


American Public Education, Inc. (APEI) - free report >>

Strayer Education, Inc. (STRA) - free report >>


More from Zacks Tale of the Tape

You May Like