Grand Canyon Education (NASDAQ:LOPE) vs. Lincoln Educational Services Corporation (LINC) Critical Analysis

Grand Canyon Education (NASDAQ: LOPE) and Lincoln Educational Services Corporation (NASDAQ:LINC) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

Grand Canyon Education has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Lincoln Educational Services Corporation has a beta of 2.77, suggesting that its share price is 177% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Grand Canyon Education	17.97%	21.53%	14.92%
Lincoln Educational Services Corporation	-16.00%	-14.19%	-5.19%

Institutional & Insider Ownership

95.7% of Grand Canyon Education shares are owned by institutional investors. Comparatively, 62.3% of Lincoln Educational Services Corporation shares are owned by institutional investors. 3.0% of Grand Canyon Education shares are owned by insiders. Comparatively, 6.1% of Lincoln Educational Services Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Grand Canyon Education and Lincoln Educational Services Corporation’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Grand Canyon Education	$894.59 million	3.87	$297.15 million	$3.38	21.77
Lincoln Educational Services Corporation	$191.55 million	0.40	$9.53 million	($1.40)	-2.22

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

Analyst Ratings

This is a summary of current recommendations and price targets for Grand Canyon Education and Lincoln Educational Services Corporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grand Canyon Education	0	0	4	0	3.00
Lincoln Educational Services Corporation	0	0	0	0	N/A

Grand Canyon Education presently has a consensus target price of $73.33, suggesting a potential downside of 0.32%. Given Grand Canyon Education’s higher probable upside, analysts plainly believe Grand Canyon Education is more favorable than Lincoln Educational Services Corporation.

Summary

Grand Canyon Education beats Lincoln Educational Services Corporation on 10 of the 12 factors compared between the two stocks.

Grand Canyon Education Company Profile

Grand Canyon Education, Inc. is engaged in the provision of postsecondary education. The Company is a regionally accredited university. The Company offers the degrees, including Doctor of Education, Doctor of Business Administration, Doctor of Nursing Practice, Doctor of Philosophy, Education Specialist, Master of Divinity, Master of Arts, Master of Education, Master of Business Administration and Master of Public Administration, Master of Public Health, Master of Science, Bachelor of Arts, Bachelor of Science, and a range of programs for its degrees. It also offers certificate programs, which consist of a series of courses focused on a particular area of study for both the post-baccalaureate and post-graduate students. The Company offers its ground-based programs to students through three 15-week semesters in a calendar year and to online students in courses that generally range from 5 to 16 weeks throughout the calendar year.

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.