Investors interested in stocks from the Transportation - Services sector have probably already heard of TFI International Inc. (TFII - Free Report) and XPO Logistics (XPO - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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.
Right now, TFI International Inc. is sporting a Zacks Rank of #1 (Strong Buy), while XPO Logistics has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that TFII likely has seen a stronger improvement to its earnings outlook than XPO has recently. However, value investors will care about much more than just this.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
TFII currently has a forward P/E ratio of 18.42, while XPO has a forward P/E of 92.72. We also note that TFII has a PEG ratio of 3.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. XPO currently has a PEG ratio of 10.14.
Another notable valuation metric for TFII is its P/B ratio of 2.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, XPO has a P/B of 2.94.
These are just a few of the metrics contributing to TFII's Value grade of B and XPO's Value grade of C.
TFII stands above XPO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TFII is the superior value option right now.