Lincoln Educational Services Corporation (NASDAQ: LINC) and Bridgepoint Education (NYSE:BPI) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Lincoln Educational Services Corporation and Bridgepoint Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lincoln Educational Services Corporation -16.19% -24.26% -8.20%
Bridgepoint Education -1.39% 9.16% 5.13%

Analyst Ratings

This is a summary of current recommendations for Lincoln Educational Services Corporation and Bridgepoint Education, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lincoln Educational Services Corporation 0 0 0 0 N/A
Bridgepoint Education 0 1 0 0 2.00

Bridgepoint Education has a consensus target price of $14.00, indicating a potential upside of 40.99%. Given Bridgepoint Education’s higher possible upside, analysts plainly believe Bridgepoint Education is more favorable than Lincoln Educational Services Corporation.

Valuation & Earnings

This table compares Lincoln Educational Services Corporation and Bridgepoint Education’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lincoln Educational Services Corporation $185.33 million 0.31 $6.13 million ($1.55) -1.49
Bridgepoint Education $510.19 million 0.57 $33.22 million ($0.06) -165.47

Bridgepoint Education has higher revenue and earnings than Lincoln Educational Services Corporation. Bridgepoint Education is trading at a lower price-to-earnings ratio than Lincoln Educational Services Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Lincoln Educational Services Corporation has a beta of 2.8, indicating that its stock price is 180% more volatile than the S&P 500. Comparatively, Bridgepoint Education has a beta of 2.19, indicating that its stock price is 119% more volatile than the S&P 500.

Institutional & Insider Ownership

62.1% of Lincoln Educational Services Corporation shares are owned by institutional investors. Comparatively, 92.8% of Bridgepoint Education shares are owned by institutional investors. 6.1% of Lincoln Educational Services Corporation shares are owned by company insiders. Comparatively, 41.5% of Bridgepoint Education shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Bridgepoint Education beats Lincoln Educational Services Corporation on 10 of the 11 factors compared between the two stocks.

Lincoln Educational Services Corporation Company Profile

Lincoln Educational Services Corporation is a provider of post-secondary education. The Company operates in two segments: Transportation and Skilled Trades, and Transitional. The Transportation and Skilled Trades segment offers academic programs in the disciplines of transportation and skilled trades (automotive, diesel, heating, ventilation and air conditioning (HVAC), welding and manufacturing). The Transitional segment includes operations that are being phased out and consists of its campus that is being taught out. It offers programs in automotive technology, skilled trades, which include HVAC, welding and computerized numerical control and electronic systems technology; healthcare services, which include nursing, dental assistant and pharmacy technician; hospitality services, which include culinary, therapeutic massage, cosmetology and aesthetics, and business and information technology, which includes information technology and criminal justice programs.

Bridgepoint Education Company Profile

Bridgepoint Education, Inc. (Bridgepoint) is a provider of postsecondary education services. The Company’s academic institutions include Ashford University and University of the Rockies. Bridgepoint’s institutions conduct ongoing faculty and student assessment processes, and provide a range of student services. It offers Constellation, its learning platform, Waypoint Outcomes, its assessment software, and its mobile application technology. As of December 31, 2016, its institutions offered over 1,200 courses and over 80 degree programs. Ashford University offers associate’s, bachelor’s and master’s degree programs online. Ashford University comprises four colleges: the Forbes School of Business and Technology, the College of Education, the College of Health, Human Services and Science, and the College of Liberal Arts. University of the Rockies is a graduate institution that offers master’s and doctoral degree programs in the social and behavioral sciences.

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