Investors looking for stocks in the Schools sector might want to consider either Career Education (CECO - Free Report) or Grand Canyon Education (LOPE - 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 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.
Career Education and Grand Canyon Education are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
CECO currently has a forward P/E ratio of 12.86, while LOPE has a forward P/E of 18.55. We also note that CECO has a PEG ratio of 0.86. 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. LOPE currently has a PEG ratio of 1.24.
Another notable valuation metric for CECO is its P/B ratio of 2.96. 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, LOPE has a P/B of 3.63.
These are just a few of the metrics contributing to CECO's Value grade of A and LOPE's Value grade of C.
Both CECO and LOPE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CECO is the superior value option right now.