DeVry Education Group (ATGE) vs. Capella Education (CPLA) Critical Review
DeVry Education Group (NYSE: ATGE) and Capella Education (NASDAQ:CPLA) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitabiliy and analyst recommendations.
Earnings and Valuation
This table compares DeVry Education Group and Capella Education’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|DeVry Education Group||$1.83 billion||1.16||$303.29 million||$1.08||31.39|
|Capella Education||$438.59 million||1.82||$71.59 million||$3.87||17.67|
DeVry Education Group has higher revenue and earnings than Capella Education. Capella Education is trading at a lower price-to-earnings ratio than DeVry Education Group, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for DeVry Education Group and Capella Education, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|DeVry Education Group||0||2||4||0||2.67|
DeVry Education Group currently has a consensus target price of $34.40, suggesting a potential upside of 1.47%. Capella Education has a consensus target price of $85.36, suggesting a potential upside of 24.80%. Given Capella Education’s higher possible upside, analysts clearly believe Capella Education is more favorable than DeVry Education Group.
Insider and Institutional Ownership
89.1% of Capella Education shares are held by institutional investors. 5.3% of DeVry Education Group shares are held by insiders. Comparatively, 3.6% of Capella Education 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.
This table compares DeVry Education Group and Capella Education’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|DeVry Education Group||3.80%||10.73%||7.64%|
DeVry Education Group pays an annual dividend of $0.18 per share and has a dividend yield of 0.5%. Capella Education pays an annual dividend of $1.64 per share and has a dividend yield of 2.4%. DeVry Education Group pays out 16.7% of its earnings in the form of a dividend. Capella Education pays out 42.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Volatility & Risk
DeVry Education Group has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Capella Education has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.
Capella Education beats DeVry Education Group on 9 of the 15 factors compared between the two stocks.
About DeVry Education Group
Adtalem Global Education Inc., formerly DeVry Education Group Inc. (DeVry Group) is a global provider of educational services. DeVry Group’s focuses on empowering its students to achieve their educational and career goals. DeVry Group’s institutions offer a range of programs in healthcare, technology, business, accounting, finance and law. The Company operates in three segments: Medical and Healthcare; International and Professional Education, and Business, Technology and Management. Medical and Healthcare includes DeVry Medical International, Chamberlain College of Nursing (Chamberlain) and Carrington College. International and Professional Education consists of DeVry Brasil and Becker Professional Education. Business, Technology and Management consists of DeVry University. As of June 30, 2016, DMI operated three institutions: American University of the Caribbean School of Medicine (AUC), Ross University School of Medicine (RUSM) and Ross University School of Veterinary Medicine.
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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