Lincoln Educational Services (LINC) vs. New Oriental Education & Tech Grp (EDU) Critical Review

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New Oriental Education & Tech Grp (NYSE:EDU) and Lincoln Educational Services (NASDAQ:LINC) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Institutional and Insider Ownership

88.8% of New Oriental Education & Tech Grp shares are owned by institutional investors. Comparatively, 63.0% of Lincoln Educational Services shares are owned by institutional investors. 15.5% of New Oriental Education & Tech Grp shares are owned by company insiders. Comparatively, 6.1% of Lincoln Educational Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares New Oriental Education & Tech Grp and Lincoln Educational Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Oriental Education & Tech Grp 9.86% 15.47% 8.27%
Lincoln Educational Services -1.85% -12.10% -3.77%

Valuation & Earnings

This table compares New Oriental Education & Tech Grp and Lincoln Educational Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
New Oriental Education & Tech Grp $2.45 billion 3.41 $296.13 million $1.87 31.29
Lincoln Educational Services $261.85 million 0.21 -$11.48 million ($0.48) -4.65

New Oriental Education & Tech Grp has higher revenue and earnings than Lincoln Educational Services. Lincoln Educational Services is trading at a lower price-to-earnings ratio than New Oriental Education & Tech Grp, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

New Oriental Education & Tech Grp has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Lincoln Educational Services has a beta of 2.28, suggesting that its share price is 128% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for New Oriental Education & Tech Grp and Lincoln Educational Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Oriental Education & Tech Grp 0 2 4 0 2.67
Lincoln Educational Services 0 0 1 0 3.00

New Oriental Education & Tech Grp presently has a consensus target price of $98.50, indicating a potential upside of 68.35%. Lincoln Educational Services has a consensus target price of $3.50, indicating a potential upside of 56.95%. Given New Oriental Education & Tech Grp’s higher possible upside, research analysts clearly believe New Oriental Education & Tech Grp is more favorable than Lincoln Educational Services.

Summary

New Oriental Education & Tech Grp beats Lincoln Educational Services on 12 of the 14 factors compared between the two stocks.

New Oriental Education & Tech Grp Company Profile

New Oriental Education & Technology Group Inc. provides private educational services under the New Oriental brand in the People's Republic of China. It operates through Language Training and Test Preparation Courses, and Others segments. The company offers test preparation courses to students taking language and entrance exams used by educational institutions in the United States, the People's Republic of China, and the Commonwealth countries; and after-school tutoring courses for middle and high school students to achieve better scores on entrance exams for admission into high schools or higher education institutions, as well as for children to teach English. It also provides language training courses, including English, as well as other foreign languages, such as German, Japanese, French, Korean, Italian, and Spanish; operates a full-time private primary and secondary school in Yangzhou seeking a full curriculum taught in Chinese and English; develops and edits educational materials for language training and test preparation comprising books, software, CD-ROMs, magazines, and other periodicals; and offers online education programs that include college, K-12, and pre-school education. In addition, the company offers overseas studies consulting; pre-school education; and a pilot program that permits third parties in small cities to provide its English and kindergarten programs, as well as overseas study tour services. As of May 31, 2018, it offered educational programs, services, and products to students through a network of 87 schools, 994 learning centers, and 18 bookstores. The company was founded in 1993 and is headquartered in Beijing, the People's Republic of China.

Lincoln Educational Services Company Profile

Lincoln Educational Services Corporation, together with its subsidiaries, provides various career-oriented post-secondary education services to high school graduates and working adults in the United States. The company operates in three segments: Transportation and Skilled Trades; Healthcare and Other Professions; and Transitional. It offers bachelor's degree, associate's degree, and diploma and certificate programs in automotive technology, skilled trades, healthcare services, hospitality services, and business and information technology areas. The company operates 23 schools in 14 states under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln College of New England, Lincoln Culinary Institute, Euphoria Institute of Beauty Arts and Sciences, and associated brand names. Lincoln Educational Services Corporation was founded in 1946 and is based in West Orange, New Jersey.

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