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Air Lease Corporation (AL) - free report >>
Westinghouse Air Brake Technologies Corporation (WAB) - free report >>
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Air Lease Corporation (AL) - free report >>
Westinghouse Air Brake Technologies Corporation (WAB) - free report >>
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AL vs. WAB: Which Stock Is the Better Value Option?
Investors interested in stocks from the Transportation - Equipment and Leasing sector have probably already heard of Air Lease (AL - Free Report) and Westinghouse Air Brake Technologies (WAB - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Air Lease has a Zacks Rank of #2 (Buy), while Westinghouse Air Brake Technologies has a Zacks Rank of #3 (Hold) right now. This means that AL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
AL currently has a forward P/E ratio of 6.42, while WAB has a forward P/E of 16.67. We also note that AL has a PEG ratio of 0.76. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. WAB currently has a PEG ratio of 1.45.
Another notable valuation metric for AL is its P/B ratio of 0.89. 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, WAB has a P/B of 2.49.
These metrics, and several others, help AL earn a Value grade of A, while WAB has been given a Value grade of C.
AL sticks out from WAB in both our Zacks Rank and Style Scores models, so value investors will likely feel that AL is the better option right now.