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GBX vs. WAB: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Transportation - Equipment and Leasing sector have probably already heard of Greenbrier Companies (GBX - Free Report) and Westinghouse Air Brake Technologies (WAB - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, Greenbrier Companies has a Zacks Rank of #2 (Buy), while Westinghouse Air Brake Technologies has a Zacks Rank of #3 (Hold). This means that GBX'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 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.

GBX currently has a forward P/E ratio of 9.79, while WAB has a forward P/E of 20.85. We also note that GBX has a PEG ratio of 1.03. 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. WAB currently has a PEG ratio of 1.81.

Another notable valuation metric for GBX is its P/B ratio of 0.99. 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, WAB has a P/B of 2.67.

Based on these metrics and many more, GBX holds a Value grade of A, while WAB has a Value grade of D.

GBX stands above WAB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GBX is the superior value option right now.


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Greenbrier Companies, Inc. (The) (GBX) - free report >>

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