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Adtalem Arm Partners With Dillard, Boosts Physician Diversity

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In order to increase the numbers of African-American doctors in the United States, Adtalem Global Education Inc.‘s (ATGE - Free Report) Ross University School of Medicine (“RUSM”) has partnered with Louisiana-based Dillard University.

Per the agreement, eligible Dillard students will be able to receive a scholarship for the first semester covering full tuition in the medical school. They will also have to spend their initial two years of school at the RUSM campus in Barbados.

Adtalem’s Commitment to Address Diversity in Medicine

RUSM — one of the medical and veterinary schools of Adtalem — has a diverse student population, of which nearly one-fourth of the total students are African-American and Hispanic. Of the total U.S. physicians, African Americans make up only 6%. Notably, RUSM African-American graduates were more than 80 students, surpassing the average of eight in most U.S. medical schools.

On that note, RUSM recently agreed upon a similar partnership with Charles Drew University of Medicine and Science, Agricultural and Mechanical University, as well as Tuskegee University. Also, the company entered into the Historically Black Colleges and Universities (“HBCU”) Partnership Challenge, created by the Congressional Bipartisan HBCU Caucus, to increase diversity in key workforce sectors.

Tie-ups with corporations, hospitals, government agencies and professional organizations enabled the company to reduce exposure to Title IV funding.

Coming to price performance, shares of Adtalem have declined 5.6% so far this year against its industry’s 30.8% growth. The company has been recording lower profits over the last few quarters. The declining earnings were mainly due to certain restructuring charges related to the closing of the Ross University School of Medicine campus in Dominica and real estate consolidations.

Nevertheless, collaborations and strategic initiatives taken up by Adtalem will probably help to spur growth and regain momentum. Notably, in the second quarter of fiscal 2019, growth of new student enrollment was 4.9% and that of total student enrollment was 2.9% year over year. The company remains optimistic about the demand trend in the medical and healthcare segment from both students and employees.

Zacks Rank & Key Picks

Currently, Adtalem carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same space include Strategic Education, Inc. (STRA - Free Report) , YogaWorks, Inc. and Bright Horizons Family Solutions Inc. (BFAM - Free Report) . While Strategic Education and YogaWorks sport a Zacks Rank #1 (Strong Buy), Bright Horizons carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Strategic Education, YogaWorks and Bright Horizons’ earnings for the current year are expected to grow 36.2%, 17.1%, and 12.8%, respectively.

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