Franklin Covey (NYSE: FC) and Universal Technical Institute (NYSE:UTI) are both small-cap business services companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.
Profitability
This table compares Franklin Covey and Universal Technical Institute’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Franklin Covey | -2.15% | -2.02% | -0.99% |
| Universal Technical Institute | -4.87% | -6.42% | -3.06% |
Insider and Institutional Ownership
54.0% of Franklin Covey shares are owned by institutional investors. Comparatively, 59.0% of Universal Technical Institute shares are owned by institutional investors. 33.5% of Franklin Covey shares are owned by insiders. Comparatively, 13.3% of Universal Technical Institute shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Franklin Covey has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, Universal Technical Institute has a beta of 3.52, suggesting that its stock price is 252% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Franklin Covey and Universal Technical Institute, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Franklin Covey | 0 | 2 | 1 | 0 | 2.33 |
| Universal Technical Institute | 0 | 0 | 0 | 0 | N/A |
Franklin Covey currently has a consensus price target of $22.00, suggesting a potential upside of 22.91%. Given Franklin Covey’s higher probable upside, analysts clearly believe Franklin Covey is more favorable than Universal Technical Institute.
Earnings & Valuation
This table compares Franklin Covey and Universal Technical Institute’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Franklin Covey | $190.57 million | 1.30 | $7.17 million | ($0.31) | -57.74 |
| Universal Technical Institute | $329.85 million | 0.26 | $14.20 million | ($0.87) | -3.93 |
Universal Technical Institute has higher revenue and earnings than Franklin Covey. Franklin Covey is trading at a lower price-to-earnings ratio than Universal Technical Institute, indicating that it is currently the more affordable of the two stocks.
Summary
Franklin Covey beats Universal Technical Institute on 8 of the 12 factors compared between the two stocks.
About Franklin Covey
Franklin Covey Co. is a global company specializing in performance improvement. The Company’s segments are Direct Offices, Strategic Markets, Education practice and International Licensees. The Direct Offices segment consists of its geographic sales offices that serve the United States and Canada, its international sales offices located in Japan, the United Kingdom and Australia, and its public programs group. The Strategic Markets segment includes its government services office, the Sales Performance practice, the Customer Loyalty practice, and a new Global 50 group, which is specifically focused on sales to large, multi-national organizations. The Education practice segment consists of its domestic and international Education practice operations, which are centered on sales to educational institutions, such as elementary schools, high schools, and colleges and universities. The International Licensees segment consists of its international licensees’ royalty revenues.
About Universal Technical Institute
Universal Technical Institute, Inc. is a provider of postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by total average undergraduate full-time enrollment and graduates. The Company offers undergraduate degree or diploma programs at approximately 12 campuses across the United States under the banner of various brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (collectively, MMI) and NASCAR Technical Institute (NASCAR Tech). The Company also offers manufacturer specific advanced training (MSAT) programs, including student-paid electives, at its campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers. UTI offers automotive, diesel and industrial, and collision repair and refinishing programs.
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