Afya (NASDAQ:AFYA) and Lincoln Educational Services (NASDAQ:LINC) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Institutional and Insider Ownership

29.2% of Afya shares are held by institutional investors. Comparatively, 64.1% of Lincoln Educational Services shares are held by institutional investors. 25.0% of Lincoln Educational Services shares are held 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.

Earnings and Valuation

This table compares Afya and Lincoln Educational Services’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Afya $182.42 million 11.53 $39.00 million $0.70 33.49
Lincoln Educational Services $273.34 million 0.38 $2.02 million $0.08 48.75

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

Analyst Recommendations

This is a breakdown of recent ratings for Afya and Lincoln Educational Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Afya 0 3 4 0 2.57
Lincoln Educational Services 0 0 4 0 3.00

Afya presently has a consensus target price of $26.53, indicating a potential upside of 13.18%. Lincoln Educational Services has a consensus target price of $5.13, indicating a potential upside of 31.41%. Given Lincoln Educational Services’ stronger consensus rating and higher possible upside, analysts plainly believe Lincoln Educational Services is more favorable than Afya.

Profitability

This table compares Afya and Lincoln Educational Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Afya 23.71% 13.56% 9.29%
Lincoln Educational Services 2.05% 15.34% 3.37%

Summary

Lincoln Educational Services beats Afya on 7 of the 12 factors compared between the two stocks.

About Afya

Afya Limited, through its subsidiaries, operates as a medical education group in Brazil. The company provides educational products and services, including medical schools, medical residency preparatory courses, graduate courses, and other programs to lifelong medical learners enrolled across its distribution network, as well as to third-party medical schools. It offers health sciences courses, which comprise medicine, dentistry, nursing, radiology, psychology, pharmacy, physical education, physiotherapy, nutrition, and biomedicine; and degree programs and courses in other subjects and disciplines, including undergraduate and post graduate courses in business administration, accounting, law, physical education, civil engineering, industrial engineering, and pedagogy. In addition, the company provides medical preparatory courses and other continuing medical education services through its online platform; and develops and sells electronically distributed educational courses on medicine science, and related printed and technological educational content. As of June 24, 2019, its network consisted of 23 operating campuses, 21 of which are undergraduate and graduate medical school campuses. The company was founded in 1999 and is headquartered in Nova Lima, Brazil.

About Lincoln Educational Services

Lincoln Educational Services Corporation, together with its subsidiaries, provides various career-oriented post-secondary education services to high school graduates and working adults in the United States. The company operates in three segments: Transportation and Skilled Trades; Healthcare and Other Professions; and Transitional. It offers associate's degree, and diploma and certificate programs in automotive technology, skilled trades, healthcare services, hospitality services, and information technology areas. The company operates 22 schools in 14 states under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln Culinary Institute, Euphoria Institute of Beauty Arts and Sciences, and associated brand names. As of December 31, 2018, it had 10,525 students enrolled. Lincoln Educational Services Corporation was founded in 1946 and is headquartered in West Orange, New Jersey.

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