American Public Education (NASDAQ: APEI) and Capella Education (NASDAQ:CPLA) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.

Institutional & Insider Ownership

92.0% of American Public Education shares are owned by institutional investors. Comparatively, 91.6% of Capella Education shares are owned by institutional investors. 3.6% of American Public Education 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, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares American Public Education and Capella 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%
Capella Education 10.49% 20.23% 15.34%

Earnings & Valuation

This table compares American Public Education and Capella 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 1.01 $56.56 million $0.95 19.74
Capella Education $438.59 million 1.75 $71.59 million $3.87 17.03

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

Volatility & Risk

American Public Education has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Capella Education has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Dividends

Capella Education pays an annual dividend of $1.64 per share and has a dividend yield of 2.5%. American Public Education does not pay a dividend. Capella Education pays out 42.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and target prices for American Public Education and Capella Education, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Public Education 0 1 0 0 2.00
Capella Education 0 1 2 0 2.67

American Public Education currently has a consensus price target of $19.00, indicating a potential upside of 1.33%. Capella Education has a consensus price target of $85.36, indicating a potential upside of 29.53%. Given Capella Education’s stronger consensus rating and higher probable upside, analysts clearly believe Capella Education is more favorable than American Public Education.

Summary

Capella Education beats American Public Education on 11 of the 16 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 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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