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WERN vs. HTLD: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Transportation - Truck sector might want to consider either Werner Enterprises (WERN - Free Report) or Heartland Express (HTLD - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Werner Enterprises has a Zacks Rank of #1 (Strong Buy), while Heartland Express has a Zacks Rank of #2 (Buy). This means that WERN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

WERN currently has a forward P/E ratio of 16.81, while HTLD has a forward P/E of 25.90. We also note that WERN has a PEG ratio of 1.16. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HTLD currently has a PEG ratio of 1.73.

Another notable valuation metric for WERN is its P/B ratio of 2.22. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, HTLD has a P/B of 2.94.

These metrics, and several others, help WERN earn a Value grade of B, while HTLD has been given a Value grade of C.

WERN has seen stronger estimate revision activity and sports more attractive valuation metrics than HTLD, so it seems like value investors will conclude that WERN is the superior option right now.


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