ITT Educational Services (NYSE: ESI) and Career Education Corp. (NASDAQ:CECO) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, dividends, valuation, earnings, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for ITT Educational Services and Career Education Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ITT Educational Services 2 0 0 0 1.00
Career Education Corp. 0 1 1 0 2.50

Career Education Corp. has a consensus price target of $12.00, suggesting a potential upside of 22.32%. Given Career Education Corp.’s stronger consensus rating and higher probable upside, analysts plainly believe Career Education Corp. is more favorable than ITT Educational Services.

Valuation and Earnings

This table compares ITT Educational Services and Career Education Corp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ITT Educational Services N/A N/A N/A $0.86 0.42
Career Education Corp. $667.62 million 1.01 $55.82 million ($0.25) -39.24

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

Profitability

This table compares ITT Educational Services and Career Education Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ITT Educational Services 2.44% 10.57% 2.86%
Career Education Corp. 3.45% 6.92% 4.20%

Risk & Volatility

ITT Educational Services has a beta of 1.96, suggesting that its share price is 96% more volatile than the S&P 500. Comparatively, Career Education Corp. has a beta of 2.64, suggesting that its share price is 164% more volatile than the S&P 500.

Insider and Institutional Ownership

62.7% of ITT Educational Services shares are owned by institutional investors. Comparatively, 76.3% of Career Education Corp. shares are owned by institutional investors. 3.8% of ITT Educational Services shares are owned by insiders. Comparatively, 4.9% of Career Education Corp. 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.

Summary

Career Education Corp. beats ITT Educational Services on 9 of the 11 factors compared between the two stocks.

ITT Educational Services Company Profile

ITT Educational Services, Inc. is a provider of postsecondary degree programs in the United States. The Company offers master, bachelor and associate degree programs to over 45,000 students, and short-term information technology and business learning solutions for career advancers and other professionals. It has approximately 138 campus locations in over 40 states. It offers online programs to students in all over 50 states. It designs its education programs, after consultation with employers and other constituents, to allow graduates prepare for careers in different fields involving their areas of study. It provides career-oriented education programs under the ITT Technical Institute name and the Daniel Webster College (DWC) name. The ITT Technical Institutes offers over 50 education programs in various fields of study across business, drafting and design, electronics technology, criminal justice, information technology (IT), and Breckinridge School of nursing and health sciences.

Career Education Corp. Company Profile

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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