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WERN vs. LSTR: 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 Werner Enterprises (WERN - Free Report) and Landstar System (LSTR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Werner Enterprises and Landstar System are both sporting a Zacks Rank of # 2 (Buy) right now. 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 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 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.

WERN currently has a forward P/E ratio of 12.98, while LSTR has a forward P/E of 17.73. We also note that WERN has a PEG ratio of 0.99. 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. LSTR currently has a PEG ratio of 1.48.

Another notable valuation metric for WERN is its P/B ratio of 2.42. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, LSTR has a P/B of 7.43.

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

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


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