American Public Education (NASDAQ: APEI) and Grand Canyon Education (NASDAQ:LOPE) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.

Institutional & Insider Ownership

93.6% of American Public Education shares are owned by institutional investors. Comparatively, 96.2% of Grand Canyon Education shares are owned by institutional investors. 3.6% of American Public Education shares are owned by insiders. Comparatively, 3.0% of Grand Canyon Education shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for American Public Education and Grand Canyon Education, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Public Education 0 1 0 0 2.00
Grand Canyon Education 0 0 4 0 3.00

American Public Education presently has a consensus target price of $19.00, indicating a potential upside of 4.97%. Grand Canyon Education has a consensus target price of $74.67, indicating a potential downside of 6.68%. Given American Public Education’s higher probable upside, analysts clearly believe American Public Education is more favorable than Grand Canyon Education.

Volatility and Risk

American Public Education has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, Grand Canyon Education has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Earnings & Valuation

This table compares American Public Education and Grand Canyon Education’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Public Education $300.31 million 0.98 $56.56 million $0.95 19.05
Grand Canyon Education $921.61 million 4.18 $310.30 million $3.62 22.10

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

Profitability

This table compares American Public Education and Grand Canyon Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Public Education 5.18% 7.87% 6.55%
Grand Canyon Education 18.77% 21.77% 15.47%

Summary

Grand Canyon Education beats American Public Education on 12 of the 14 factors compared between the two stocks.

About American Public Education

American Public Education, Inc. provides online and on-campus postsecondary education. The Company provides postsecondary education through its subsidiary institutions, American Public University System, Inc. (APUS) and Hondros College of Nursing (HCON). It operates through two segments: American Public Education Segment, which consists of the operational activities of APUS, other corporate activities, and minority investments, and Hondros College of Nursing Segment, which consists of the operational activities of HCON. APUS provides online postsecondary education to approximately 88,700 adult learners serving the needs of the military and public safety communities as of December 31, 2016. As of December 31, 2016, HCON provided nursing education to approximately 1,300 students across five campuses in the State of Ohio, as well as online. It offers a Diploma in Practical Nursing and an Associate Degree in Nursing. As of December 31, 2016, the Company had approximately 90,000 students.

About Grand Canyon Education

Grand Canyon Education, Inc. is engaged in the provision of postsecondary education. The Company is a regionally accredited university. The Company offers the degrees, including Doctor of Education, Doctor of Business Administration, Doctor of Nursing Practice, Doctor of Philosophy, Education Specialist, Master of Divinity, Master of Arts, Master of Education, Master of Business Administration and Master of Public Administration, Master of Public Health, Master of Science, Bachelor of Arts, Bachelor of Science, and a range of programs for its degrees. It also offers certificate programs, which consist of a series of courses focused on a particular area of study for both the post-baccalaureate and post-graduate students. The Company offers its ground-based programs to students through three 15-week semesters in a calendar year and to online students in courses that generally range from 5 to 16 weeks throughout the calendar year.

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