American Public Education (NASDAQ: APEI) and Career Education Corporation (NASDAQ:CECO) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Institutional and Insider Ownership

92.0% of American Public Education shares are owned by institutional investors. Comparatively, 75.4% of Career Education Corporation shares are owned by institutional investors. 3.6% of American Public Education shares are owned by insiders. Comparatively, 4.9% of Career Education Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

American Public Education has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Career Education Corporation has a beta of 2.74, suggesting that its share price is 174% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for American Public Education and Career Education Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Public Education 0 1 0 0 2.00
Career Education Corporation 0 1 1 0 2.50

American Public Education presently has a consensus price target of $19.00, suggesting a potential downside of 1.55%. Career Education Corporation has a consensus price target of $13.00, suggesting a potential upside of 31.18%. Given Career Education Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Career Education Corporation is more favorable than American Public Education.

Earnings and Valuation

This table compares American Public Education and Career Education Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Public Education $300.31 million 1.04 $56.56 million $0.95 20.32
Career Education Corporation $631.21 million 1.08 $42.44 million ($0.36) -27.53

American Public Education has higher revenue, but lower earnings than Career Education Corporation. Career Education Corporation is trading at a lower price-to-earnings ratio than American Public Education, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Public Education and Career Education Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Public Education 5.18% 7.87% 6.55%
Career Education Corporation -3.82% 3.73% 2.35%

Summary

Career Education Corporation beats American Public Education on 7 of the 13 factors compared between the two stocks.

About American Public Education

American Public Education, Inc. provides online and on-campus postsecondary education. The Company provides postsecondary education through its subsidiary institutions, American Public University System, Inc. (APUS) and Hondros College of Nursing (HCON). It operates through two segments: American Public Education Segment, which consists of the operational activities of APUS, other corporate activities, and minority investments, and Hondros College of Nursing Segment, which consists of the operational activities of HCON. APUS provides online postsecondary education to approximately 88,700 adult learners serving the needs of the military and public safety communities as of December 31, 2016. As of December 31, 2016, HCON provided nursing education to approximately 1,300 students across five campuses in the State of Ohio, as well as online. It offers a Diploma in Practical Nursing and an Associate Degree in Nursing. As of December 31, 2016, the Company had approximately 90,000 students.

About Career Education Corporation

Career Education Corporation, through its colleges, institutions and universities, offers education to students in a range of career-oriented disciplines through online, on-ground and hybrid learning programs. The Company’s American InterContinental University (AIU) and Colorado Technical University (CTU) provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. The Company operates through four segments: CTU, AIU, Culinary Arts and Transitional Group. Its University group consists of AIU and CTU, which serve students online with career-focused degree programs. Its Career Colleges Group consists of Culinary Arts and Transitional Group segments. The Culinary Arts segment includes Le Cordon Bleu institutions in North America (LCB), which offer hands-on educational programs in the career-oriented disciplines of culinary arts and patisserie and baking in the commercial-grade kitchens of Le Cordon Bleu.

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