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UTI or BFAM: Which Is the Better Value Stock Right Now?

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Investors interested in Schools stocks are likely familiar with Universal Technical Institute (UTI - Free Report) and Bright Horizons Family Solutions (BFAM - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Universal Technical Institute has a Zacks Rank of #2 (Buy), while Bright Horizons Family Solutions has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that UTI has an improving earnings outlook. However, value investors will care about much more than just this.

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 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.

UTI currently has a forward P/E ratio of 22.92, while BFAM has a forward P/E of 33.65. We also note that UTI has a PEG ratio of 1.53. 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. BFAM currently has a PEG ratio of 3.48.

Another notable valuation metric for UTI is its P/B ratio of 3.78. 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, BFAM has a P/B of 5.

These are just a few of the metrics contributing to UTI's Value grade of B and BFAM's Value grade of D.

UTI sticks out from BFAM in both our Zacks Rank and Style Scores models, so value investors will likely feel that UTI is the better option right now.


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Universal Technical Institute Inc (UTI) - free report >>

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