Career Education Corporation (NASDAQ: CECO) and Capella Education (NASDAQ:CPLA) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.
Earnings and Valuation
This table compares Career Education Corporation and Capella Education’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Career Education Corporation||$631.21 million||1.08||$42.44 million||($0.36)||-27.53|
|Capella Education||$438.59 million||1.79||$71.59 million||$3.87||17.40|
Capella Education has higher revenue, but lower earnings than Career Education Corporation. Career Education 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.
This table compares Career Education Corporation and Capella Education’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Career Education Corporation||-3.82%||3.73%||2.35%|
Volatility and Risk
Career Education Corporation has a beta of 2.74, indicating that its share price is 174% more volatile than the S&P 500. Comparatively, Capella Education has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.
Capella Education pays an annual dividend of $1.64 per share and has a dividend yield of 2.4%. Career Education Corporation does not pay a dividend. Capella Education pays out 42.4% of its earnings in the form of a dividend.
This is a summary of current ratings and recommmendations for Career Education Corporation and Capella Education, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Career Education Corporation||0||1||1||0||2.50|
Career Education Corporation currently has a consensus price target of $13.00, indicating a potential upside of 31.18%. Capella Education has a consensus price target of $87.00, indicating a potential upside of 29.18%. Given Career Education Corporation’s higher possible upside, equities analysts plainly believe Career Education Corporation is more favorable than Capella Education.
Institutional and Insider Ownership
75.4% of Career Education Corporation shares are owned by institutional investors. Comparatively, 91.5% of Capella Education shares are owned by institutional investors. 4.9% of Career Education Corporation shares are owned by insiders. Comparatively, 3.6% of Capella Education shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Capella Education beats Career Education Corporation on 10 of the 15 factors compared between the two stocks.
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.
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.
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