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LSTR vs. ODFL: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Transportation - Truck sector might want to consider either Landstar System (LSTR - Free Report) or 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.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Landstar System has a Zacks Rank of #2 (Buy), while Old Dominion Freight Line has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that LSTR likely has seen a stronger improvement to its earnings outlook than ODFL has recently. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

LSTR currently has a forward P/E ratio of 13.46, while ODFL has a forward P/E of 25.14. We also note that LSTR has a PEG ratio of 1.12. 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 1.59.

Another notable valuation metric for LSTR is its P/B ratio of 6.63. 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, ODFL has a P/B of 8.50.

Based on these metrics and many more, LSTR holds a Value grade of B, while ODFL has a Value grade of D.

LSTR has seen stronger estimate revision activity and sports more attractive valuation metrics than ODFL, so it seems like value investors will conclude that LSTR is the superior option right now.


In-Depth Zacks Research for the Tickers Above


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

Landstar System, Inc. (LSTR) - free report >>

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