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

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Investors interested in Transportation - Truck stocks are likely familiar with ArcBest (ARCB - Free Report) and Saia (SAIA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.

Currently, both ArcBest and Saia are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

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 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 16, while SAIA has a forward P/E of 31.99. We also note that ARCB has a PEG ratio of 1.05. 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. SAIA currently has a PEG ratio of 1.35.

Another notable valuation metric for ARCB is its P/B ratio of 2.33. 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, SAIA has a P/B of 5.91.

These are just a few of the metrics contributing to ARCB's Value grade of B and SAIA's Value grade of D.

Both ARCB and SAIA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ARCB is the superior value option right now.


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