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ALK vs. LUV: Which Stock Is the Better Value Option?
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Investors with an interest in Transportation - Airline stocks have likely encountered both Alaska Air Group (ALK - Free Report) and Southwest Airlines (LUV - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Alaska Air Group has a Zacks Rank of #2 (Buy), while Southwest Airlines has a Zacks Rank of #5 (Strong Sell). This means that ALK's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.
ALK currently has a forward P/E ratio of 7.33, while LUV has a forward P/E of 11.26. We also note that ALK has a PEG ratio of 0.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LUV currently has a PEG ratio of 0.43.
Another notable valuation metric for ALK is its P/B ratio of 1.40. 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, LUV has a P/B of 1.70.
These are just a few of the metrics contributing to ALK's Value grade of A and LUV's Value grade of C.
ALK has seen stronger estimate revision activity and sports more attractive valuation metrics than LUV, so it seems like value investors will conclude that ALK is the superior option right now.
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ALK vs. LUV: Which Stock Is the Better Value Option?
Investors with an interest in Transportation - Airline stocks have likely encountered both Alaska Air Group (ALK - Free Report) and Southwest Airlines (LUV - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Alaska Air Group has a Zacks Rank of #2 (Buy), while Southwest Airlines has a Zacks Rank of #5 (Strong Sell). This means that ALK's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.
ALK currently has a forward P/E ratio of 7.33, while LUV has a forward P/E of 11.26. We also note that ALK has a PEG ratio of 0.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LUV currently has a PEG ratio of 0.43.
Another notable valuation metric for ALK is its P/B ratio of 1.40. 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, LUV has a P/B of 1.70.
These are just a few of the metrics contributing to ALK's Value grade of A and LUV's Value grade of C.
ALK has seen stronger estimate revision activity and sports more attractive valuation metrics than LUV, so it seems like value investors will conclude that ALK is the superior option right now.