Back to top

Image: Bigstock

JBHT vs. ODFL: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Transportation - Truck sector might want to consider either JB Hunt (JBHT - Free Report) or Old Dominion Freight Line (ODFL - 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.

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.

Currently, JB Hunt has a Zacks Rank of #2 (Buy), while Old Dominion Freight Line has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that JBHT is likely seeing its earnings outlook improve to a greater extent. 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 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.

JBHT currently has a forward P/E ratio of 19.20, while ODFL has a forward P/E of 25.83. We also note that JBHT has a PEG ratio of 1.28. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ODFL currently has a PEG ratio of 1.53.

Another notable valuation metric for JBHT is its P/B ratio of 5.73. 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, ODFL has a P/B of 9.66.

These metrics, and several others, help JBHT earn a Value grade of B, while ODFL has been given a Value grade of D.

JBHT sticks out from ODFL in both our Zacks Rank and Style Scores models, so value investors will likely feel that JBHT is the better option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


J.B. Hunt Transport Services, Inc. (JBHT) - free report >>

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

Published in