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

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Investors interested in stocks from the Transportation - Truck sector have probably already heard of ArcBest (ARCB - Free Report) and Heartland Express (HTLD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

ArcBest and Heartland Express are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This means that ARCB'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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

ARCB currently has a forward P/E ratio of 11.74, while HTLD has a forward P/E of 23.58. We also note that ARCB has a PEG ratio of 0.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HTLD currently has a PEG ratio of 1.57.

Another notable valuation metric for ARCB is its P/B ratio of 1.47. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HTLD has a P/B of 2.76.

Based on these metrics and many more, ARCB holds a Value grade of A, while HTLD has a Value grade of C.

ARCB sticks out from HTLD in both our Zacks Rank and Style Scores models, so value investors will likely feel that ARCB is the better option right now.


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Heartland Express, Inc. (HTLD) - free report >>

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