Education Stocks: Finally a Buy? – Grand Canyon Education Inc (LOPE), Strayer Education Inc (STRA), Corinthian Colleges Inc (COCO)

Unlike the other two in the pack, Strayer Education Inc (NASDAQ:STRA) is a profitable company that pays a dividend too. At the current market price, up nearly 20% to its 52-week low, the stock offers a mouth watering dividend yield of close to 8%.

This high yield is a result of the 25% drop in the stock price in the last six months. The weakness in Strayer Education’s core operations, which started in 2011, continued throughout much of last year; however, the results in the latest quarter indicate a turnaround is underway.

While its revenue and net income both increased, the growth in profits from $4.1 million to $16.6 million was markedly high. It is also worth noting that the company carried a high amount of cash – $47.5 million at the end of the quarter against the long term debt of $121.9 million.

Overall, this could be a time to start looking favorably at education stocks as the impact of negative factors is already reflected in stock prices and investor sentiment for the sector is at a record low. The recovery in the sector, as suggested by a steady improvement in jobs data, may be a gradual one and may take a long time to fructify. However, attractive entry points more than make up for a delayed rally.

The article Education Stocks: Finally a Buy? originally appeared on Fool.com and is written by Jacob Wolinsky.

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