Investors looking for stocks in the Transportation - Truck sector might want to consider either Werner Enterprises (WERN - Free Report) or Heartland Express (HTLD - 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Werner Enterprises has a Zacks Rank of #1 (Strong Buy), while Heartland Express has a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that WERN has an improving earnings outlook. But this is just one piece of the puzzle 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.
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.
WERN currently has a forward P/E ratio of 16.48, while HTLD has a forward P/E of 24.44. We also note that WERN has a PEG ratio of 1.14. 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. HTLD currently has a PEG ratio of 1.63.
Another notable valuation metric for WERN is its P/B ratio of 2.17. 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 2.75.
Based on these metrics and many more, WERN holds a Value grade of B, while HTLD has a Value grade of C.
WERN has seen stronger estimate revision activity and sports more attractive valuation metrics than HTLD, so it seems like value investors will conclude that WERN is the superior option right now.