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ARCB vs. ODFL: 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 Old Dominion Freight Line (ODFL - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

ArcBest and Old Dominion Freight Line are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ARCB is likely seeing its earnings outlook improve to a greater extent. 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.

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.

ARCB currently has a forward P/E ratio of 15.73, while ODFL has a forward P/E of 30.96. We also note that ARCB has a PEG ratio of 1.11. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ODFL currently has a PEG ratio of 2.03.

Another notable valuation metric for ARCB is its P/B ratio of 1.97. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ODFL has a P/B of 7.85.

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

ARCB is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ARCB is likely the superior value option right now.


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Old Dominion Freight Line, Inc. (ODFL) - free report >>

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