Contrasting Lincoln Educational Services (LINC) and Bright Scholar Education Holdngs (BEDU)

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Lincoln Educational Services (NASDAQ:LINC) and Bright Scholar Education Holdngs (NYSE:BEDU) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Volatility and Risk

Lincoln Educational Services has a beta of 2.28, suggesting that its share price is 128% more volatile than the S&P 500. Comparatively, Bright Scholar Education Holdngs has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.

Earnings & Valuation

This table compares Lincoln Educational Services and Bright Scholar Education Holdngs’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lincoln Educational Services $261.85 million 0.18 -$11.48 million ($0.48) -4.08
Bright Scholar Education Holdngs $201.61 million 7.07 $26.11 million $0.25 44.80

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

Insider & Institutional Ownership

62.9% of Lincoln Educational Services shares are owned by institutional investors. Comparatively, 13.2% of Bright Scholar Education Holdngs shares are owned by institutional investors. 6.2% of Lincoln Educational Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Lincoln Educational Services and Bright Scholar Education Holdngs’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lincoln Educational Services -1.85% -12.10% -3.77%
Bright Scholar Education Holdngs 14.37% 12.61% 7.75%

Analyst Ratings

This is a breakdown of current ratings and price targets for Lincoln Educational Services and Bright Scholar Education Holdngs, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lincoln Educational Services 0 0 1 0 3.00
Bright Scholar Education Holdngs 0 1 2 0 2.67

Lincoln Educational Services currently has a consensus target price of $3.50, indicating a potential upside of 78.57%. Bright Scholar Education Holdngs has a consensus target price of $17.00, indicating a potential upside of 51.79%. Given Lincoln Educational Services’ stronger consensus rating and higher probable upside, research analysts plainly believe Lincoln Educational Services is more favorable than Bright Scholar Education Holdngs.

Summary

Bright Scholar Education Holdngs beats Lincoln Educational Services on 8 of the 14 factors compared between the two stocks.

About Lincoln Educational Services

Lincoln Educational Services Corporation, together with its subsidiaries, provides various career-oriented post-secondary education services to high school graduates and working adults in the United States. The company operates in three segments: Transportation and Skilled Trades; Healthcare and Other Professions; and Transitional. It offers bachelor's degree, associate's degree, and diploma and certificate programs in automotive technology, skilled trades, healthcare services, hospitality services, and business and information technology areas. The company operates 23 schools in 14 states under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln College of New England, Lincoln Culinary Institute, Euphoria Institute of Beauty Arts and Sciences, and associated brand names. Lincoln Educational Services Corporation was founded in 1946 and is based in West Orange, New Jersey.

About Bright Scholar Education Holdngs

Bright Scholar Education Holdings Limited operates K-12 schools in China. Its schools comprise international schools, bilingual schools, and kindergartens. The company also offers a range of complementary education services, including international camps and after-school programs. As of May 31, 2018, it had a network of 67 schools with approximately 35,275 students. The company was founded in 1994 and is based in Foshan, China.

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