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Universal Technical Institute Inc (UTI) - free report >>
Lincoln Educational Services Corporation (LINC) - free report >>
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Universal Technical Institute Inc (UTI) - free report >>
Lincoln Educational Services Corporation (LINC) - free report >>
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LINC or UTI: Which Is the Better Value Stock Right Now?
Investors interested in Schools stocks are likely familiar with Lincoln Educational Services Corporation (LINC - Free Report) and Universal Technical Institute (UTI - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Lincoln Educational Services Corporation and Universal Technical Institute are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that LINC likely has seen a stronger improvement to its earnings outlook than UTI has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
LINC currently has a forward P/E ratio of 22.96, while UTI has a forward P/E of 23.62. We also note that LINC has a PEG ratio of 1.53. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. UTI currently has a PEG ratio of 1.57.
Another notable valuation metric for LINC is its P/B ratio of 2.23. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, UTI has a P/B of 3.76.
These are just a few of the metrics contributing to LINC's Value grade of B and UTI's Value grade of C.
LINC sticks out from UTI in both our Zacks Rank and Style Scores models, so value investors will likely feel that LINC is the better option right now.