Investors with an interest in Transportation - Shipping stocks have likely encountered both Hoegh LNG (HMLP - Free Report) and Kirby (KEX - 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 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.
Currently, both Hoegh LNG and Kirby are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
HMLP currently has a forward P/E ratio of 10.74, while KEX has a forward P/E of 28.49. We also note that HMLP has a PEG ratio of 0.75. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. KEX currently has a PEG ratio of 2.08.
Another notable valuation metric for HMLP is its P/B ratio of 1.60. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, KEX has a P/B of 1.61.
Based on these metrics and many more, HMLP holds a Value grade of A, while KEX has a Value grade of D.
Both HMLP and KEX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HMLP is the superior value option right now.