Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Diversified Consumer Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Diversified Consumer Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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3 Undervalued Diversified Consumer Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Diversified Consumer Services industry for Thursday, October 10, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Diversified Consumer Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Adtalem Global Education Inc.’s Value Grade

Value Grade:

Adtalem Global Education Inc. engages in the provision of workforce solutions worldwide. It operates through three segments: Chamberlain, Walden, and Medical and Veterinary. The company offers degree and non-degree programs, including bachelor’s, master’s, and doctoral degrees, as well as online certificates in the medical, nursing, health professions and veterinary postsecondary education, counseling, business, psychology, public health, social work and human services, public administration and public policy, and criminal justice industries. It operates Chamberlain University, Walden University, American University of the Caribbean School of Medicine, Ross University School of Medicine, and Ross University School of Veterinary Medicine. The company was formerly known as DeVry Education Group Inc. and changed its name to Adtalem Global Education Inc. in May 2017. Adtalem Global Education Inc. was incorporated in 1987 and is based in Chicago, Illinois.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Adtalem Global Education Inc. has a Value Score of 69, which is considered to be undervalued.

When you look at Adtalem Global Education Inc.’s price-to-sales ratio at 1.87 compared to the industry median at 1.15, this company has a higher price relative to revenue compared to its peers. This could make Adtalem Global Education Inc.’s stock less attractive for value investors.

Adtalem Global Education Inc.’s price-earnings ratio is 21.40 compared to the industry median at 18.35. This means it has a higher share price relative to earnings compared to its peers. This could make Adtalem Global Education Inc. less attractive for value investors.

Now, let’s assess Adtalem Global Education Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 8.1, when compared to the industry median of 11.4, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Adtalem Global Education Inc.’s shareholder yield is higher than its industry median ratio of 0.00%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Adtalem Global Education Inc.’s price-to-book ratio is higher than its industry median ratio of 1.27. This could make Adtalem Global Education Inc. less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Adtalem Global Education Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Adtalem Global Education Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 15.05. This could make Adtalem Global Education Inc. more attractive because the lower P/FCF ratio indicates that Adtalem Global Education Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Laureate Education, Inc.’s Value Grade

Value Grade:

Laureate Education, Inc., together with its subsidiaries, offers higher education programs and services to students through a network of universities and higher education institutions. The company provides a range of undergraduate and graduate degree programs in the areas of business and management, medicine and health sciences, and engineering and information technology through campus-based, online, and hybrid programs. It also offers specialized courses for technical and vocational training; and senior high school. Its services are provides in Mexico, Peru, and the United States. The company was formerly known as Sylvan Learning Systems, Inc. and changed its name to Laureate Education, Inc. in May 2004. Laureate Education, Inc. was founded in 1989 and is headquartered in Miami, Florida.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Laureate Education, Inc. has a Value Score of 77, which is considered to be undervalued.

Laureate Education, Inc.’s price-earnings ratio is 12.3 compared to the industry median at 18.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Laureate Education, Inc. more attractive for value investors.

Laureate Education, Inc.’s price-to-book ratio is lower than its peers. This could make Laureate Education, Inc. more attractive for value investors when compared to the industry median at 1.27.

You can read more about Laureate Education, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Perdoceo Education Corporation’s Value Grade

Value Grade:

Perdoceo Education Corporation provides postsecondary education through online, campus-based, and blended learning programs in the United States. It operates in two segments, Colorado Technical University and The American InterContinental University System. The Colorado Technical University segment offers academic programs, such as business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity, and criminal justice. The American InterContinental University System segment provides academic programs, including business studies, information technologies, education, and health sciences. The company also offers non-degree and professional development programs. In addition, it operates intellipath, a learning platform used to educate students; and a mobile application and two-way messaging platform. The company was formerly known as Career Education Corporation and changed its name to Perdoceo Education Corporation in January 2020. Perdoceo Education Corporation was incorporated in 1994 and is headquartered in Schaumburg, Illinois.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Perdoceo Education Corporation has a Value Score of 82, which is considered to be undervalued.

Perdoceo Education Corporation’s price-earnings ratio is 10.4 compared to the industry median at 18.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Perdoceo Education Corporation more attractive for value investors.

Perdoceo Education Corporation’s price-to-book ratio is lower than its peers. This could make Perdoceo Education Corporation more attractive for value investors when compared to the industry median at 1.27.

You can read more about Perdoceo Education Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Diversified Consumer Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Diversified Consumer Services stocks as well as other industrys.

Choosing Which of the 3 Best Diversified Consumer Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Adtalem Global Education Inc. stock has a Value Grade of B.
• Laureate Education, Inc. stock has a Value Grade of B.
• Perdoceo Education Corporation stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Diversified Consumer Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Diversified Consumer Services Stocks

Want to learn more about Diversified Consumer Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Diversified Consumer Services Stocks for Thursday, October 10
• 4 Undervalued Diversified Consumer Services Stocks for Wednesday, October 09
• 5 Undervalued Diversified Consumer Services Stocks for Tuesday, October 08
• 6 Undervalued Diversified Consumer Services Stocks for Monday, October 07

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.