Bridgepoint Education (NYSE: BPI) and Career Education Corporation (NASDAQ:CECO) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Bridgepoint Education and Career Education Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bridgepoint Education 0 1 0 0 2.00
Career Education Corporation 0 1 1 0 2.50

Bridgepoint Education currently has a consensus price target of $14.00, suggesting a potential upside of 55.56%. Career Education Corporation has a consensus price target of $13.00, suggesting a potential upside of 49.25%. Given Bridgepoint Education’s higher probable upside, analysts clearly believe Bridgepoint Education is more favorable than Career Education Corporation.

Profitability

This table compares Bridgepoint Education and Career Education Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bridgepoint Education -1.39% 9.16% 5.13%
Career Education Corporation -3.82% 3.73% 2.35%

Risk and Volatility

Bridgepoint Education has a beta of 2.17, suggesting that its share price is 117% more volatile than the S&P 500. Comparatively, Career Education Corporation has a beta of 2.67, suggesting that its share price is 167% more volatile than the S&P 500.

Earnings and Valuation

This table compares Bridgepoint Education and Career Education Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bridgepoint Education $510.19 million 0.51 $33.22 million ($0.06) -149.98
Career Education Corporation $631.21 million 0.95 $42.44 million ($0.36) -24.19

Career Education Corporation has higher revenue and earnings than Bridgepoint Education. Bridgepoint Education is trading at a lower price-to-earnings ratio than Career Education Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

91.9% of Bridgepoint Education shares are held by institutional investors. Comparatively, 74.7% of Career Education Corporation shares are held by institutional investors. 41.5% of Bridgepoint Education shares are held by company insiders. Comparatively, 4.9% of Career Education Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

About Bridgepoint Education

Bridgepoint Education, Inc. (Bridgepoint) is a provider of postsecondary education services. The Company’s academic institutions include Ashford University and University of the Rockies. Bridgepoint’s institutions conduct ongoing faculty and student assessment processes, and provide a range of student services. It offers Constellation, its learning platform, Waypoint Outcomes, its assessment software, and its mobile application technology. As of December 31, 2016, its institutions offered over 1,200 courses and over 80 degree programs. Ashford University offers associate’s, bachelor’s and master’s degree programs online. Ashford University comprises four colleges: the Forbes School of Business and Technology, the College of Education, the College of Health, Human Services and Science, and the College of Liberal Arts. University of the Rockies is a graduate institution that offers master’s and doctoral degree programs in the social and behavioral sciences.

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.

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