Universal Technical Institute (NYSE: UTI) and Franklin Covey (NYSE:FC) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitabiliy, valuation, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Universal Technical Institute and Franklin Covey’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Technical Institute -4.87% -6.42% -3.06%
Franklin Covey -2.15% -2.02% -0.99%

Institutional & Insider Ownership

60.4% of Universal Technical Institute shares are owned by institutional investors. Comparatively, 53.7% of Franklin Covey shares are owned by institutional investors. 13.3% of Universal Technical Institute shares are owned by insiders. Comparatively, 33.5% of Franklin Covey 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.

Earnings and Valuation

This table compares Universal Technical Institute and Franklin Covey’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Universal Technical Institute $335.86 million 0.27 $9.65 million ($0.87) -4.14
Franklin Covey $190.57 million 1.27 $7.17 million ($0.31) -56.45

Universal Technical Institute has higher revenue and earnings than Franklin Covey. Franklin Covey is trading at a lower price-to-earnings ratio than Universal Technical Institute, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Universal Technical Institute has a beta of 3.52, meaning that its stock price is 252% more volatile than the S&P 500. Comparatively, Franklin Covey has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Universal Technical Institute and Franklin Covey, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Technical Institute 0 0 0 0 N/A
Franklin Covey 0 2 1 0 2.33

Franklin Covey has a consensus target price of $22.00, suggesting a potential upside of 25.71%. Given Franklin Covey’s higher possible upside, analysts plainly believe Franklin Covey is more favorable than Universal Technical Institute.

Summary

Franklin Covey beats Universal Technical Institute on 8 of the 12 factors compared between the two stocks.

About Universal Technical Institute

Universal Technical Institute, Inc. is a provider of postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians as measured by total average undergraduate full-time enrollment and graduates. The Company offers undergraduate degree or diploma programs at approximately 12 campuses across the United States under the banner of various brands, including Universal Technical Institute (UTI), Motorcycle Mechanics Institute and Marine Mechanics Institute (collectively, MMI) and NASCAR Technical Institute (NASCAR Tech). The Company also offers manufacturer specific advanced training (MSAT) programs, including student-paid electives, at its campuses and manufacturer or dealer sponsored training at certain campuses and dedicated training centers. UTI offers automotive, diesel and industrial, and collision repair and refinishing programs.

About Franklin Covey

Franklin Covey Co. is a global company specializing in performance improvement. The Company’s segments are Direct Offices, Strategic Markets, Education practice and International Licensees. The Direct Offices segment consists of its geographic sales offices that serve the United States and Canada, its international sales offices located in Japan, the United Kingdom and Australia, and its public programs group. The Strategic Markets segment includes its government services office, the Sales Performance practice, the Customer Loyalty practice, and a new Global 50 group, which is specifically focused on sales to large, multi-national organizations. The Education practice segment consists of its domestic and international Education practice operations, which are centered on sales to educational institutions, such as elementary schools, high schools, and colleges and universities. The International Licensees segment consists of its international licensees’ royalty revenues.

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