Investors looking for stocks in the Transportation - Truck sector might want to consider either ArcBest (ARCB - Free Report) or Heartland Express (HTLD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.
ArcBest has a Zacks Rank of #1 (Strong Buy), while Heartland Express has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that ARCB likely has seen a stronger improvement to its earnings outlook than HTLD has recently. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
ARCB currently has a forward P/E ratio of 16.13, while HTLD has a forward P/E of 27.51. We also note that ARCB has a PEG ratio of 0.45. 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. HTLD currently has a PEG ratio of 1.83.
Another notable valuation metric for ARCB is its P/B ratio of 1.79. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HTLD has a P/B of 2.77.
These metrics, and several others, help ARCB earn a Value grade of A, while HTLD has been given a Value grade of C.
ARCB stands above HTLD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ARCB is the superior value option right now.