LINC vs. BFAM: Which Stock Is the Better Value Option?
Investors with an interest in Schools stocks have likely encountered both Lincoln Educational Services Corporation (LINC) and Bright Horizons Family Solutions (BFAM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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 has a Zacks Rank of #2 (Buy), while Bright Horizons Family Solutions has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that LINC likely has seen a stronger improvement to its earnings outlook than BFAM has recently. But this is just one piece of the puzzle for value investors.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
LINC currently has a forward P/E ratio of 24.86, while BFAM has a forward P/E of 29.93. We also note that LINC has a PEG ratio of 1.66. 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 1.75.
Another notable valuation metric for LINC is its P/B ratio of 1.77. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BFAM has a P/B of 4.08.
These are just a few of the metrics contributing to LINC's Value grade of B and BFAM's Value grade of D.
LINC stands above BFAM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LINC is the superior value option right now.
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Lincoln Educational Services Corporation (LINC) : Free Stock Analysis Report
Bright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis Report
