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TRTN vs. WAB: Which Stock Is the Better Value Option?
Investors looking for stocks in the Transportation - Equipment and Leasing sector might want to consider either Triton International (TRTN - Free Report) or Westinghouse Air Brake Technologies (WAB - 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Triton International and Westinghouse Air Brake Technologies are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TRTN has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
TRTN currently has a forward P/E ratio of 8.72, while WAB has a forward P/E of 18.65. We also note that TRTN has a PEG ratio of 0.87. 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. WAB currently has a PEG ratio of 6.37.
Another notable valuation metric for TRTN is its P/B ratio of 1.20. 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, WAB has a P/B of 1.34.
These metrics, and several others, help TRTN earn a Value grade of A, while WAB has been given a Value grade of C.
TRTN sticks out from WAB in both our Zacks Rank and Style Scores models, so value investors will likely feel that TRTN is the better option right now.