Head to Head Comparison: Capella Education (CPLA) and Lincoln Educational Services Corporation (LINC)

Capella Education (NASDAQ: CPLA) and Lincoln Educational Services Corporation (NASDAQ:LINC) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Risk & Volatility

Capella Education has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Lincoln Educational Services Corporation has a beta of 2.77, indicating that its share price is 177% more volatile than the S&P 500.

Institutional and Insider Ownership

89.1% of Capella Education shares are held by institutional investors. Comparatively, 61.5% of Lincoln Educational Services Corporation shares are held by institutional investors. 3.6% of Capella Education shares are held by company insiders. Comparatively, 6.1% of Lincoln Educational Services Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Capella Education pays an annual dividend of $1.64 per share and has a dividend yield of 2.4%. Lincoln Educational Services Corporation does not pay a dividend. Capella Education pays out 42.4% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Capella Education 10.49% 20.23% 15.34%
Lincoln Educational Services Corporation -16.19% -24.26% -8.20%

Earnings and Valuation

This table compares Capella Education and Lincoln Educational Services Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Capella Education $438.59 million 1.78 $71.59 million $3.87 17.31
Lincoln Educational Services Corporation $185.33 million 0.42 $6.13 million ($1.55) -2.02

Capella 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 Capella Education, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Capella Education and Lincoln Educational Services Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capella Education 0 1 2 0 2.67
Lincoln Educational Services Corporation 0 0 0 0 N/A

Capella Education presently has a consensus price target of $85.36, indicating a potential upside of 27.41%. Given Capella Education’s higher probable upside, equities research analysts plainly believe Capella Education is more favorable than Lincoln Educational Services Corporation.

Summary

Capella Education beats Lincoln Educational Services Corporation on 11 of the 14 factors compared between the two stocks.

About Capella Education

Capella Education Company is an education services company. The Company provides direct path between learning and employment through its online postsecondary education offerings and through programs to develop job-ready skills for demand markets. The company’s segments include post-secondary segment and job-ready skills segment. The post-secondary segment has Capella University (the University) and Sophia Learning, LLC (Sophia). The job-ready skills segment has Capella Learning Solutions, LLC (CLS), Hackbright Academy, Inc. (Hackbright) and DevMountain, LLC (DevMountain). The Company’s program offers six markets, which include public service leadership; nursing and health sciences; social and behavioral sciences; business and technology; education and undergraduate studies. Capella University offers over 1,940 online courses and approximately 50 academic programs with approximately 150 specializations to approximately 38,000 learners.

About Lincoln Educational Services Corporation

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.

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